Shimla: In a significant move, the Himachal Pradesh High Court has directed the closure of 18 loss-making hotels owned by the Himachal Pradesh Tourism Development Corporation (HPTDC). Justice Ajay Mohan Goel, presiding over a single-judge bench, ordered the properties to cease operations by November 25, 2024, holding the HPTDC Managing Director personally responsible for implementing the decision.
The court described the hotels as “white elephants” and stated that their continued operation places an undue financial burden on the already strained state exchequer. Justice Goel emphasized, “Judicial notice can be taken of the financial crunch faced by the state, which is regularly highlighted in cases involving public funds.”
Reasons Behind the Closure
The decision stems from concerns about persistently low occupancy rates and the unsustainable cost of maintaining the properties. The court noted that retaining these hotels was a drain on public resources, particularly at a time when the state is grappling with a severe financial crisis.
In its order, the court stated, “To ensure that public resources are not wasted, these properties shall be closed forthwith from November 25, 2024, as their operations are currently not financially viable.”
Hotels Facing Closure: A List of Iconic Properties
The order includes several prominent hotels, many located in prime tourist destinations. These include:
- The Palace Hotel, Chail
- Hotel Dhauladhar, Dharamshala
- Hotel Kunal, Dharamshala
- Hotel Apple Blossom, Fagu
- Hotel Chandrabhaga, Keylong
- Hotel Deodar, Khajjiar
- Hotel Log Huts, Manali
- Hotel Bhagsu, McLeodganj
- Hotel Shivalik, Parwanoo
The closures are expected to impact local economies and tourism-related employment significantly.
State Government’s Reaction: Plans to Challenge the Order
Chief Minister Sukhvinder Singh Sukhu has announced plans to challenge the High Court’s decision in the Supreme Court. While the state government recognizes the financial strain, it argues that the decision to close or sustain public assets rests with the administration.
Revenue Minister Jagat Singh Negi expressed concerns about the potential job losses and emphasized exploring alternatives to closure. Speaking to ANI, he said, “These hotels were built to promote tourism. If they are underperforming, efforts should be made to revitalize them rather than shutting them down outright.”
Negi added, “The court may comment on institutions, but the final prerogative to operate or close them lies with the state government.”
Himachal Bhavan in Delhi Attached Over Unpaid Dues
In a related development, the High Court recently attached Himachal Bhavan in Delhi due to unpaid electricity dues amounting to ₹150 crore. The Congress-led state government’s inability to clear the dues further highlights the fiscal challenges it faces.
Impact on Tourism and Jobs
The closure of these hotels is expected to have far-reaching implications. Many of the properties hold cultural and historical significance, such as The Palace Hotel in Chail and Hotel Naggar Castle in Kullu. Additionally, local communities dependent on tourism fear the loss of jobs and economic opportunities.
Looking Ahead: What Lies Ahead for HPTDC and Himachal’s Finances
While the High Court’s decision aims to address the immediate fiscal strain, it underscores the broader challenge of balancing financial accountability with sustainable development. As the state government prepares to appeal the order in the Supreme Court, all eyes will be on the outcome, which could set a precedent for the management of state-owned enterprises nationwide.
