Mumbai: The BMC, which took over Mumbai hotels to accommodate essential service staff, including doctors on Covid-19 duty and to quarantine Covid-positive asymptomatic patients, is yet to settle its dues for services availed of in the last four months, said Gurbaxish Singh Kohli, president of the HRAWI (Hotels and Restaurants Association, Western India).
Kohli told The Free Press Journal, "There are 3,000 hotel rooms taken over for essential service staffers in 92 hotels in Mumbai but no money has been paid to hoteliers by the cash-rich BMC. They have the money, they have received considerable financial support from big corporations, so then why are they not paying hoteliers? With no business during the lockdown, we agreed to the BMC taking over the running of hotels on no profit-no loss basis. Today, to revive the business, the BMC should pay a lump sum as early as possible."
According to Deputy Municipal Commissioner Parag Masurkar, "These are two different matters. One set of hotels were used for essential service staff and there were hotels used for quarantine purposes. I am looking after the clearance of bills for hotels used to lodge essential service workers, and these bills have been paid. There is an issue with bills of hotels used for quarantine purposes but that is not with me."
However, Kohli rubbished the reply of Masurkar and said, "Regardless of whether the BMC used hotels to lodge staff or quarantine patients, none of the dues have been settled."
When contacted, BMC chief Iqbal Singh Chahal said he would not like to comment on the issue before looking into the matter in detail.
In its initial circular, the BMC had mentioned the SDRR (Stamp Duty Ready Reckoner) mode of calculation for tariffs. However, it clarified verbally to hoteliers that this mode of calculation would not be applied to hotels and was meant for those places where such a calculation was not possible - like the NSCI Dome, BKC grounds, Goregaon NSE, schools, residential buildings, halls or open plots and so on; rather, it was meant for sites where the BMC was not using any facilities except the premises and would itself be providing electricity, water, lighting, bedding, fans, toilets, etc.
Later on, in view of objections of hotel associations to the SDRR mode of calculation, the BMC had set up a committee to look into the issue and it was decided to pay hotels based on their star rating. On June 10, a fresh circular was issued with increased tariff rates, which came into effect eight days after.
The revised rates per day are: Rs 3,500 for five-star hotels, Rs 2,500 for four-star hotels and Rs 1,500 for others. Previously, the rates per day were: Rs 2,000 for five-star hotels, Rs 1,500 for four-star hotels and Rs 500 for others.
Kohli informed, "The rates they are paying are not high because normally, a five-star hotel charges Rs 18,000 per night for a stay. We are not telling them to pay higher rates but the revised rates should be pro-rated to Day 1, when the hotels were taken over in April."
Paramjit Singh Ghai, the managing partner of Hotel Samrat in Khar, is the only hotelier in Mumbai to have received compensation from the BMC. He told The Free Press Journal, "I could get my money only because I followed up with different departments and had to reach out to a minister, which should not be the case. Moreover, for having lodged essential staffers for the past three months, I am being paid only Rs 3 lakh. The calculation has been made on the basis of the Stamp Duty ready reckoner rate, which refers to the value of land. It is not acceptable why the BMC is calculating bills thus. One should understand, we are not selling our properties but have provided service to essential service providers at this critical time, including food, stay, laundry etc."
Further, he explained that the payment made by the BMC barely works out to Rs127 per room, per day. "I received Rs 2,77,772, excluding GST. If I calculate it by 2187 (27 rooms for 81 days), it works out to Rs 127. This payment is a mockery of even a token compensation and does not even cover our utility bills and running expenses, " he explained.
Kohli explained, "The BMC is fooling us and they are ready to pay us as per the revised rates starting from June 18, which is wrong. Hotels have been taken over by the BMC from April, so the bills should be paid as per the revised rates from Day 1."
Further, he stated, there is an issue only with the BMC; other cities or states had maintained transparency while taking over hotels for essential service workers. For instance, said Kohli, Delhi was paying Rs 3,200 for starred hotels and Rs 2,500 for others. So, the HRAWI had recommended that the BMC follow the Delhi model.
In India there are about 55,000 hotels and five lakh restaurants. The association has estimated losses of Rs 1.50 lakh crore. If timely assistance is not provided, several hotels and restaurants will be compelled to shut down, it is feared.
