TAJ MAY REGRET DEAL WITH FOMENTO!

MALLYA REPLAY: Cidade de Goa is built in such a way that access to the beach, except though the hotel, has historically been tough, acting as a deterrent to most locals and giving hotel guests almost exclusive access. Now in a Mallya-replay the owners of the Fomento Group are allegedly disposing off their assets so as to relocate to the UK to escape penalties for illegal mining

by Rajan Narayan



And a few stray thoughts for yet another Saturday. For a Saturday following the week when Indian Hotels Company Limited which owns the Taj Group may discover it has made a major mistake in buying management control of Fomento Group hotels. For a Saturday following the week when tourism in Goa took another hit with Finnair suspending operations after 25 years. For a Saturday following the week when former Calangute MLA Agnelo Fernandes demanded a special quota for niz Goenkars in government jobs. For a Saturday following the week when it was suggested a sentinel scheme should be set up to check corruption in government offices. For a Saturday following the week when the state government sought a loan of over `200 crore to repay the SEZ allottees.

TAJ IN THE SOUP

And a few stray thoughts on Indian Hotels Company Limited which owns the Taj Group paying a heavy price for lack of due diligence in taking over the management of the Fomento Group hotels.
On Monday, the Taj Group signed an agreement with Anju Timblo, Managing Director of the 207-room, 30-year-old Cidade De Goa and the new 299-room hotel coming up on a cliff (allegedly within the CRZ no-development zone). The Taj Group was hoping to increase its numbers of rooms in Goa by an additional 500 with the takeover of the management of the two Fomento-owned properties. The question is whether the Taj Group has included a clause which protects them from previous liabilities of the two Fomento properties?
It may be recalled that the deal between the Ambani brothers, Mukesh and Anil, on the former taking over 22,000 crore worth of assets fell through as Anil would not agree to take responsibility for additional liabilities that come up. There is a very high risk that as in the case of Reliance Telecom, in the case of Fomento also, the burden of paying the penalty for illegal mining likely to be imposed by the government will have to be borne by the Taj Group. The Shah Commission appointed by the Supreme Court had estimated that the total loss due to illegal mining in Goa exceeded35,000 crore which along with interest has risen to 65,000 crore according to Goa Foundation. Of the mining companies, the Timblo-owned Fomento Group has the maximum cases of violations of the rules governing annual extraction capacity. It is estimated that the Timblo group over-extracted ore to the extent of over 1000% per year during the Chinese boom. This and other irregularities committed by Fomento may make them liable for a fine exceeding20,000 crore.
The impression that has gained ground is that the Fomento family is planning to liquidate its assets in Goa and do a Vijay Mallya. Ambar Timblo, who now virtually controls the groups, has already sent his wife and children to the UK, and is alleged to have bought himself British citizenship under the quota for ‘high net worth individuals’. The ‘golden visa’ scheme, officially called a “Tier 1 investor” visa in the UK, gave individuals residency in exchange for investing £2m in UK bonds or shares through a bank, with applicants eligible for indefinite leave to remain, and even full citizenship, after five years. Those offering £5m could settle after three years, and those with £10m after just two.
The Tata Group seems to have failed to do due diligence before entering into a 22-year contract for the management of the existing and under construction Fomento properties. They did not question why the cash-rich Timblos, who made huge amounts of money during the Chinese ore export boom, should have agreed to offer the jewel in their crown — Cidade de Goa — to the Taj Group.
Cidade De Goa was a favorite of Anju Timblo, the wife of the chairman of the group, Avdhoot Timblo. Cidade was the first starred hotel in the capital city and was initially managed by the ITC group. I was personally associated with marketing the public issue of the Fomento resorts along with Ivo Cardoso.
In 2008 when Digambar Kamat was chief minister, the Supreme Court passed an order to demolish a large part of the hotel, including the Grand Sala — the banquet hall — for CRZ violations. Chief Minister Digambar Kamat, who was virtually controlled by Avdhoot Timblo, retrospectively amended the law to legalize the illegal expansion of Cidade De Goa.
The Fomentos have been very close to Digambar Kamat, and indeed to every government, because they control the MLAs from the mining areas by reportedly funding their elections. A PIL is also pending against the new 299 room hotel which is coming up on a cliff, and which allegedly falls within the CRZ no-development zone despite the recent liberalization of the CRZ laws.
There is every possibility that the Supreme Court may in the review petition order the demolishing of the Cidade de Goa property and overturn the amendment by Digambar Kamat. The new property may also have to be demolished if the PIL filed against it succeeds.

FINNAIR GONE

And a few stray thoughts on tourism in Goa suffering another setback with Finnair which brought tourists from Sweden and Switzerland to Goa shutting down operations after 25 years.
Finnair was among the first charter operations which later converted itself into a scheduled airline which included those who came by charter. This is part of the trend of the steep fall in charter tourism witnessed during the current tourism season. The Russian tourists who were the largest charter arrivals were less than 50% of the previous years, possibly due to the troubled situation in Ukraine. Tourists from the UK have also dropped sharply because of the confusion due to the UK leaving the EEC.
The only tourists who still seem to be interested in coming to Goa in huge numbers are domestic tourists — both from the top classes of societies and the aam aadmi. The majority of well-to-do tourists are either gamblers who come over the weekend to fritter away their money at casinos, or members of the bhaarats of couples who are holding a destination celebration.
Indeed destination weddings have been a major source of income for hotels big and small during the current season with even relatively small properties like Prainha in Dona Paula being among the major attraction.
At the other end of the social ladder, lakhs of lower middle class and middle class domestic tourists come to Goa every weekend to drink themselves sick because daru is cheaper in Goa than any other part of the country. The main attraction for the lower class tourists who come in buses or SUVs is the beaches and the semi-nude and nude firangs sunbathing.
Ironically the English and other tourists from western countries are desperate to become brown, while naturally brown beautiful Indian women are desperate to become white and ‘fair and lovely’ or even ‘fair and handsome’. The male domestic tourists not only buy daru by the crate and take it to the beach, but leave broken glass on the beach.
Only after a lot of shouting and screaming from Calangute MLA Michael Lobo, a law was passed in the recent session of the Legislative Assembly, imposing a fine of 2,000 for individuals drinking on the beach, which rises to20,000 in the case of groups. The fines also applies to groups of tourists who come in buses along with their own gas cylinders and cook in the open on the beach or on footpaths or public spaces. It is not known what impact the new fine on drinking and cooking will have on the arrival of domestic tourists.
Though the government keeps taking of attracting high end rich tourists it is not bothered about creating infrastructure. There are changing rooms and toilets only on the Calangute, Baga and Candolim beaches, with no such facilities in the popular beaches of South Goa.
The breakdown of waste management and the sight of garbage everywhere also puts-off tourists. There is garbage piled up even on beaches, the main attraction for foreign tourists. The cancelation of Sunburn and other EDM parties in the last few years have also affected arrivals of peak of the peak season. Courtesy Babu Azagaocar Sunburn is back on February 23 and 24, which might provide some relief to hotel owners.

RESERVATION FOR NIZ GOENKARS

And a few stray thoughts on the former Calangute MLA demanding reservations for niz Goenkars. He is referring to the original sons and daughters of the soil of Goa.
The problem is that niz Goenkars, both Hindu and Catholic, may be willing to do menial jobs in London at 20 pounds per hour, but will not do it for 500 per day in Goa as the migrants will. It is in fact that the emigration of a large number of Goans, particularly Catholic Goans, has created a major labour crisis in Goa. There is a shortage of maids, drivers, plumbers, electricians and even mechanics. There is also a large demand for unskilled labour in construction and for cleaning compounds etc. Forget about skilled professionals like electricians and AC mechanics, even the jobs of helpers fetch a salary of600 at a minimum in Goa.
But Agnelo Fernandes is probably referring to the fact that the second and third generation Goans are taking up a lots of the government jobs in Goa. Before Liberation there were no technical educational institutions in the state. So much so that all most of the engineers who manage the Electricity and Water Supply Department, not to mention the Telecom Department, came from outside Goa. Those who joined as Junior Engineers are now Executive Engineers and the chairperson of the Electricity Board is a Malayali woman — Rekha Mathew.
Similarly in the PWD also many of the senior positions are held by people who migrated to Goa at the time of Liberation and settled in the state. Their children and grandchildren having achieved domicile by virtue of being born in Goa or spending 15 years here and are equally eligible for all government jobs.
When I came to Goa in 1983 less than 10% of the nurses in the GMC were Malayalis. Now the proportion is closer to 30 to 40%. Some of the children and grandchildren of the original migrants have become doctors and engineers also. When I was in the ICU after a cardiac problem, there was resentment because I was actually a cardiac patient. But when the doctor in charge of the ICU who was a Malayali discovered that I was originally from Kerala his whole attitude changed.
Similarly, the bulk of government primary school teachers or even private schools, are the children are of 1st, 2nd and 3rd generation migrants. The problem of creating reservations for niz Goenkars is deciding how to define a niz Goenkar. When people are happy with something I have written and because of my fight for Konkani they tell me that I am more Goenkar than even the niz Goenkar. When they are angry with something I have written I become a bhaile again. Goans don’t need reservations. They need job opportunities in Goa. Which will only happen if there is less opposition to investment in industry and the hospitality sector and the educational standards improve.
Everyone complaints about Goan diploma holders and engineers not having the skills needed for a job. Nobody talks about what my colleague describes as red-English. Indeed I have worked with a colleague who cannot even spell English words and cannot be trusted to make out a cheque because he does not know the spelling of rupee.
And a few stray thoughts on the proposal to have a sentinel scheme for all government offices like the one DG Muktesh Chandra introduced for the traffic police. Under the sentinel scheme citizens are rewarded for reporting traffic violations using a mobile phone. Indeed the DG claims more than half the population of Goa have been served with challans by the traffic department. The only problem is that the identity of those who spied on their friends or strangers and reported to the police got leaked with deadly consequences. A mobile dealer in Shiroda who was allegedly responsible for 500 challans was bashed up by locals for being a sneak and his shop was damaged.
There is a much greater need to introduce a similar scheme to check corruption in all government offices. On the top of the list should be the police department where the havaldar at the police station refuses to register your complaint because it’s against someone influential, or will require too much effort, or will register the complaint against your enemy only if bribed. Cops have even started beating up aam aadmis for complaining about them to higher officers.
Fortunately, with Parrikar out of action, some authority has come back to police officers. When Parrikar was healthy everyone used to get away by calling him up to release them and the RSS workers and followers among the police. Now the police officers have regained their authority but many are misusing their powers.
Next in the line for corruption is the Revenue Department where a lot of money can be made. This is because thousands of mundkar and tenant cases are pending and the Mamlatdars have the authority for taking decisions on mutation and fixing the price. The Mamlatdar’s office is also responsible for providing birth and residency certificates which are desperately needed to get admission to colleges and school.
The office of the RTO is equally corrupt. If you go through a driving school you can get a license even without any test. But if you go directly and are a perfect driver you will be denied the license until you bribe the RTO. There is corruption in every department of the Government. You cannot get a cheque from the PWD for work you’ve carried out without bribing everybody from the sanctioning authority to the cashier who issues cheques. In the Accounts Department you have to pay speed money for your file to wake up and run, instead of sleeping forever. If sentinels are set up for all government departments the extent of corruption in departments will come down sharply.

LOAN TO PAY SEZ ALLOTTEES

And a last stray thought on how, during the tenure of senior Rane as chief minister and Alex Sequeira as chairman of the IDC, a large number of plots were given to industrialists under the Special Economic Zone. It was later discovered that land was given to builders for non-industrial purposes on the recommendation of the chief minister, the industries minister and the chairman of the IDC. After a prolonged agitation, Digambar Kamat, who succeeded Rane as chief minister, cancelled the SEZ scheme and got back some of the land that was allotted to land sharks. But some of the projects had been passed by the Centre and these parties took the Goa government to court.
Finally in an out of court settlement, the Goa government has agreed to pay back the amounts the companies had paid for the plots with interest at 18%. The total amount works out to more than `200 crore. Since the government is bankrupt it has had to ironically apply for a loan to pay the allottees for returning the land (which had been given to them improperly, without following rules).
Nothing off course will stop corruption in IDC. On one occasion Parrikar caught the then MD red handed accepting a bribe from a friend of his. But he could not do anything since under the rules the officer cannot be sacked without an inquiry. Even during suspension an officer has to be paid 80% of his salary. And after three months of suspension if he has not been found guilty he has to be paid his full salary.



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