Goa government may settle Aguada dispute with hotel firm

PANAJI: A year after the state government commenced proceedings to take over the 3 lakh sqm of Aguada land it leased to Indian Resort Hotels Ltd (IHCL) for 50 years, the state now appears to favour an out-of-court settlement to resolve the issue. This was revealed during a discussion at the Goa tourism board meeting this week.
The land was leased to IHCL, operating Taj group of hotels, in 1997 on the condition that it would develop an amusement park and recreational facilities, and the rent was fixed at Rs 1 crore a year or 5% of gross turnover, whichever was higher. The lease was set to expire in 2047.
IHCL was first issued a showcause notice in 2013 to pay dues. However, the government did not pursue the matter.
In 2021, then tourism secretary J Ashok Kumar, after hearing both parties, ordered the company to pay Rs 65 crore comprising arrears and interest, and said if it failed to pay the same, the arrears would be recovered as arrears of land revenue under the Land Revenue Code. Kumar then passed an order cancelling the 1997 lease agreement.
IHCL went to court challenging the tourism department's orders and filed an application for arbitration and reconciliation. While an arbitrator was appointed, after the first hearing, both parties requested that no order be passed as they would attempt to mutually resolve the issue, a tourism official said.
After a consultation with the chief minister, IHCL agreed to pay the principal amount Rs 22.5 crore, but failed to do so by the stated date. When the matter came up for hearing before the arbitrator, it requested additional time. In October, it paid Rs 10.5 crore, while the balance of Rs 12 crore was to be paid within 30 days of receiving all approvals required for the project. The company laid down certain conditions to be fulfilled before it paid arrears, the official said.
He said that IHCL wants interest to be waived off, the lease agreement to be restored, and the lease term to be renewed by further 49 years after the expiry of the initial lease term which ends in 2047. It also wants a single-window clearance agency to be designated to speedy issuance of clearances for the project before it pays the remaining principal amount. The matter will now be referred to the state cabinet for a decision.