The Hindu : Business : Great Eastern Hotel staff put on notice

Online edition of India's National Newspaper
Friday, Mar 18, 2005

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Business

Great Eastern Hotel staff put on notice

By Indrani Dutta

NO GREAT FUTURE?: The newly painted 165-years-old Great Eastern Hotel in Kolkata is in for restructuring. — Photo: Parth Sanyal

KOLKATA, MARCH 16. The ailing Great Eastern Hotel (GEH), billed as the country's oldest running hotel, is getting a fresh coat of paint. At about the same time, its 430-odd employees are facing a bleak future with the Government flinging at them an early separation scheme (ERS).

The State Tourism Department, which runs the hotel, has virtually put it on notice saying that if the employees fail to opt for the ERS by March 26, then the heritage hotel will have a natural death since it is not possible for the Government to foot its monthly salary bill of Rs. 25 lakhs any longer. Both employee unions affiliated to the CITU and the INTUC, have expressed their reservations about the ERS with the INTUC threatening to take to legal recourse and the CITU seeking an extension of the ERS deadline.

The Department for International Development (DFID) of the United Kingdom (U.K.), which has been extending assistance to the State Government for restructuring public sector enterprises, has agreed to foot the ERS bill of the hotel, estimated to cost Rs. 15 crores. The darkness clouding the minds of the employees is in stark contrast to the whitewash that the hotel is being given by the Government prior to a proposed hiving off of a majority of its stake. Many hotel majors, including the Park Hotel group and ITC, are waiting with bated breath just as the employees, having participated in a global bid to takeover the hotel.

Located bang in the middle of the city's central business district and spread out over nearly five acres, GEH has been operational since 1840. It was under a private management till the 1970s when first the Centre and then the West Bengal Government stepped in to protect the employees who were not even getting their wages. It was nationalised in 1980.

Although the three-storeyed hotel with a grand façade had its roll of loyal clientele, many factors including PSU majors, lacklustre management, siphoning off of funds, irregular appointments (it has only 35 hotel diploma holders) and unpaid dues weakened its status. Since 1994 the State government has tried various options (including roping in the French major Accor) to revive the hotel. At that time the unions put up a united resistance garnering the support of even the International Labour Organisation (ILO) to fob off any privatisation effort. The then chief minister, Jyoti Basu, also asked his colleagues not to exert any pressure against employees' consensus so as to carry them along. Since then losses of the hotel have piled up as customer patronage has dwindled, paving the way for another face-off between the unions and the State government.

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