SHILLONG: After a protracted arbitration, the state government has decided that the lessee handling the Crowborough Hotel project in the city should complete and make the building operational within 36 months.
The project, conceptualised 30 years ago, had faced many hurdles and drained the state exchequer due to several court cases.
The Meghalaya Tourism Development Corporation (MTDC) had appointed retired Judge BK Sharma of the Gauhati High Court to be the arbitrator between MTDC and lessee Lessly Shylla to settle dispute over the delay in completion of the project.
The initial agreement with Shylla was to construct and run the hotel after paying Rs 99.89 crore to MTDC for a period of 33 years, but the lessee had paid Rs 10 crore though the hotel was incomplete.
It was after the lessee violated the agreement that MTDC had decided to go for arbitration.
In a written reply to The Shillong Times, the managing director of MTDC, RC Sohkhlet, said after arbitration, it was decided that the “building has to be completed and made functional for operation by the party within a period of 36 months commencing from October”.
The project will be monitored by MTDC to know the progress of work on a monthly basis till completion.
According to MTDC, if the party fails to complete the building and make it operational within 36 months, it will have to clear all payments which include arrears and applicable taxes within a period of six months after issuing notice for such default.
Moreover, MTDC has the right to terminate the lease agreement forthwith not exceeding 60 days from the receipt of notice.
MTDC said the pending lease dues of the firm to the corporation are to the tune of Rs 1001.445 lakh.
The lessee had made an assurance in the past that the project was expected to be completed in December 2015.
Earlier, the state government had incurred losses due to the delay in the completion of the hotel project initiated in 1987.
The government had incurred loss of around Rs 7.6 crore for paying the dues to the two firms which had been allotted to take up the project in the past.
The government had first awarded the project to M/s SA Builders in 1987 at a total estimated cost of Rs 2.6 crore and the firm was given 20 months’ time to complete the project from the date of allotment.
However, the government had to scrap the agreement with the firm in June 1989 for its inability to complete the project within the stipulated time.
Following this, the government awarded the project to M/s Astra Construction Limited at the cost of Rs 2.65 crore in February 19, 1993 giving 15 months to complete the project.
The government scrapped the agreement with M/s Astra Construction Limited on September 30, 1996, after it failed to meet the deadline.
The government had already paid Rs 2.6 crore to the M/s SA Builders and later, another amount of Rs 2.65 crore was paid to the M/s Astra Construction Limited.
After the government scrapped these two agreements, the two firms approached the court against the decision of the government which further led to the delay in completing the project.
The government and the two firms finally agreed to have an out of court settlement which resulted in government paying Rs 1.94 crore to M/s SA Builders and Rs 1.3 crore to M/s Astra Construction Limited as compensation.
