It could not be ascertained whether the land taken on lease from the Airport Authority of India for the project will be returned. Under the altered plan, the group will build an additional 150 super-deluxe garden villas adjacent to Leela Kempinski. This will be ready by June 1999. Leela group officials were, however, not available for comments.

Originally, the super-deluxe hotel was to be a joint venture between Four Seasons and Leela Hotels. Saudi King, the Saudi Arabia-based five-star hotel chain, had made certain investments with Four Seasons.

But the plan was called off after Four Seasons backed out of the venture. The Leela management then decided to go it alone and even laid the foundation for the new venture.

The group is also believed to have put another plot of land measuring two-and-a-half lakh square feet opposite theLeela Lace factory at Andheri-Kurla road in Mumbai for sale. The asking price for the plot is about Rs 37 crore.

According to sources, the management may have taken these decisions on account of recessionary pressures. But despite a slowdown, Leela managed to keep its occupancy levels around 70 per cent. Though not as good as its previous boom-year figures, it is still the highest in the industry for the lean season. Most importantly, revenue per available room at Rs 5,066, is also the highest in the industry.

But the half-yearly performance of Hotel Leelaventure fails to inspire. Net profit for the six-month period ended September 30, 1998 has actually dipped by 18.12 per cent to Rs 16.4 crore. This, analysts say, clearly reflects the problem of operating a single property in Mumbai.

Moreover, the completion of renovations and refurbishment at its Goa property in the fag end of the second quarter and consequent charge on the P&L, have effected the company's performance.

Icra recently placedLeelaventures' Rs 130-crore NCD issue and the Rs 49.1-crore fixed-deposit programme under rating watch. The company had used loans from banks and financial institutions to fund its five-star hotel projects in Mumbai, Bangalore, Udaipur and Goa.