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Roots Corpn in talks to set up hotels at railway hubs

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pk_moahnkumar--621x414Roots Corporation, a Tata Group subsidiary that operates Ginger brand of hotels, is in an advanced discussion with Rail Land Development Authority (RLDA), Indian Railway Construction Company (Ircon) and other parties, to set up multi-functional complexes (MFCs) in Allahabad, Raipur, Udaipur and Mumbai stated a report in DNA.

The company is also planning to re-bid for 15 more MFCs out of 108 sites. P K Mohankumar, Managing Director and CEO, Roots Corporation said, “The Railways is looking at hotels as part of infrastructure for all its railway hubs under the Five-Year Plan. They have plans to create new assets and new infrastructure facilities by way of malls, shopping centres and commercial spaces. This will create income from the non-performing assets of the Railways which are otherwise lying idle.”

While RLDA has appointed Ircon to put up the structured sites on bid, the land sites are put on bid by RLDA itself. “Ircon is a government agency appointed by RLDA. The latter has provided sites to Ircon which has made the structures or shells and have put them up for bids. Last year around 13 such sites were put up by Ircon and we had bid for three of them,” said an official.

The budget hotel chain is currently having discussion with RLDA, Ircon and the consortium of developers who were awarded the sites. Ginger had also bid for a land site in Mumbai at Lokmanya Tilak Terminus, for which it is having a progressive discussion. “The authorities should invite bids from serious players from the hospitality industry who have the required know-how to construct and manage hotels. Some of the bids were awarded to parties who do not have the necessary expertise. The four sites for which we have been approached are in a discussion stage. We are still evaluating on them. Making hotels in these sites will see some fair amount of investment since they just have the shell in place. So there should be a proper business sense in them for us to invest,” said the official.

According to Mohankumar, Ginger has potential to come up with hotels in every railway hub. “We should synergise with the Railways and come up with hotels in these railway hubs. We will go for re-bidding,” he said.

Talking about the company’s growth plan, Mohankumar said, “Over the next four years we plan to add 70-80 more properties. Of this, around 25-30 per cent will be our owned properties, while the rest will be through management contracts and franchisees.

Though we will pursue our greenfield and leased-and-revenue share model, we will focus more on management contracts and franchise route for faster growth for the next three to four years.” Ginger currently has a portfolio of 30 properties. The hotel chain has also identified potential in pilgrimage destinations and is planning to come up with properties in Tirupati, Katra and Shirdi through a mix of management contracts and franchisees.

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