Making a foray into hospitality industry for the first time, Visakhapatnam Metropolitan Region Development Authority (VMRDA) has proposed to have star hotels constructed on its prime sites at Siripuram.

Business proposals

According to sources, two noted firms have evinced interest in the project and the VMRDA is understood to have given them five to six business proposals including joint venture, revenue-sharing and outright sale of the sites.

Reliable sources close to the development say that the VMRDA authorities have shown several sites to the two companies, but their interests are confined to the sites adjacent to the VMRDA office.

Among the sites is the one that was given to Vaibhav Jewellers earlier for a commercial venture but cancelled. Since then, the site has been vacant.

The other site is the adjacent to the HSBC where the VMRDA has been planning to set up information technology (IT) towers since long, apart from its recent pursuits with the Software Technology Park of India (STPI) for the project.

Both the companies are keen on undertaking a project involving a three or four-star budget hotel with 100 to 120 rooms on a site in the heart of the city, it is learnt.

Though bigger sites were also shown on the city outskirts, the firms are not keen on investing in them.

Sources say that the idea seems to go in for a venture in relatively small sites of one acre or more, for manageability and profitability. And now, the companies have to choose their investment model and scale of investment.

 Approval needed

Metropolitan Commissioner P. Basanth Kumar says that the companies need to put forth their proposals before their respective boards.  Once approved, the proposals need to be submitted to VMRDA for approval by its board,  he says.

The A. P. Urban Infrastructure and Asset Management Company Limited will play the role of consultant for the VMRDA for taking the proposals forward.

With both the companies actively pursuing the proposals after positive response from the officials concerned, the sources say, the firms are keen on setting up the hotels on both the sites, if everything goes well.