Q: Why did you terminate the agreement now?
A: Because the EIH failed to honour the stipulation in the joint venture agreement that the hotel would be made fully commercially operational within six years of the signing of the agreement. The clause provided for automatic termination of the deal. We have not acted in a hurry. It is a well-considered decision based on sound legal advice.

Q: But EIH alleges that the Government deliberately caused delay in commissioning by withholding the clearances.
A: The clearances were withheld because the hotel did not fulfill the conditions stipulated for a completion certificate. EIH even altered the height of the hotel which is prohibited under the
building laws. Even the high court did not give it clearances for deviations. It did not apply for some of the mandatory clearances.

Q: How come the Government is objecting to the fall in its equity share which was unavoidable to the hike in the project cost?
A: EIH inflated the figures on project costs. The agreement stipulated that our equity share will not be less than 35 and theirs not more than 65 per cent. The equity ratio was arbitrarily
altered and our share brought to just 22 per cent by hiking the cost tremendously. We have been telling them to see reason but they were taking us for a ride.

Q: But didn't the equity imbalance arise because of the Government's refusal
to invest?
A: If the Government was to invest Rs 30-40 crore, then we could well have constructed the hotel on our own. We are for private investment in the tourism sector. The Government would have disinvested in other ventures as well but for this bitter experience.

Q: EIH alleges that the BJP Government was biased against the project from
day one?
A: We were not biased but have been alive to the fact that the joint venture agreement was a total sell-out by the previous Congress government. The agreement is outrightly favourable to
them. As much as 102 bighas of prime land and thousands of deodar trees were given to them for a song. They were just dictating terms.

Q:What is the way out of the current impasse?
A: The onus is on them to rectify the mistakes on construction and equity shares. Unless that happens, there can be no rethink by the Government. The Government has taken over the management of the hotel but is open to negotiations. They should mend their ways. We want them to be just. But at the same time, the Government is not averse to inviting tenders again for running the hotel.

Q: Will the Government accept Justice R.S. Pathak as the sole arbitrator, as suggested by EIH?
A: We will propose our own arbitrator. In any case, there is a 30-day time period to consider this issue.

Q: EIH has charged the Government with arm-twisting and misuse of state authority?
A: We have acted in the interests of the state. If they misconstrue it as arm-twisting, little can be done. I had offered to meet their chairman in the midst of the assembly session but
they were never serious about it.

Q: Won't the controversy send a wrong signal to private investors in future?
A: Rather it will send the right signal. It has proved that the state Government will not shut its eyes to the interests of the state.