As per the Cabinet decision, the concession in premium has been hiked from 50 per cent to 90 per cent for one-, two- and three-star hotels. But the biggest giveaway is in the four- and five-star categories which were ineligible for concessions earlier. Now, for four-star hotels, the concessions has gone up from 0 to 85 per cent and from 0 to 75 percent for five star hotels. It is because of this huge concession that a massive chunk of the Rs 80 cr sop has been cornered by the hotels like Leela Kempinski, Ramda Inn. Among other major beneficiaries areParamount, Blink, Ramani, Vivako, Vaijaydeep and Sea Princes

All these hotels were granted additional FSI by the erstwhile Congress government between February 16 and November 23, 1990. While granting additional floor index to hotels, schools and hospitals, the Congress had amended the Development Control Rules to provide for levy of premium on additional FSI. It had also proposed that 50 per cent of the premium amount will be given to the municipal corporation, while the remaining will be credited to the account of the government.

However, since the Congress government had not chalked out a formula for the recovery of the premium, it took an undertaking from these institutions that whenever the amount is decided, the same will be paid by them.

When the alliance government came to power in March 1995, within two months (On May 9, 1995), it drafted a comprehensive formula for levy of premium. According to this, the amount will depend on the market price of the buildup area and will be shared equally bythe government and the Mumbai Municipal Corporation.

However, the proposal was opposed by the hotel-owners on the ground that a market price-based premium was too exorbitant. They contended that the move will hit the industry in the metropolis and pointed out that no other state or municipal corporation was levying such a hefty premium.

Simultaneously, the cause of the hotels was also taken up by the Tourism department and the Maharashtra Tourism Development Corporation, which pleaded that it was essential to help the industry in view of the acute shortage of space in the metropolis.

As per official records, though additional FSI was granted to as many as 19 hotels between March 25, 1991 and August 31, 1997, only four establishments deposited the premium amount, and that too in parts.

Initially, the Finance Department had opposed the proposal, saying at a juncture when the alliance government was facing acute shortage of funds, it would not be proper for it to grant concessions to starhotels.

However, subsequently, it amended its views and agreed for concessions proposed by the urban development department headed by Chief Minister Manohar Joshi.

Predictably, a section of the senior BJP as well as Shiv Sena Ministers have expressed strong displeasure over the decision. The mood was summed by one senior Sena minister who wondered: ``At a juncture when several major issues, including the on-going row over disposal of surplus land for revival of sick and closed textile mills, were pending before the cabinet, what was the urgency to take up the cause of five star hotels?'' FSI bonanza ...ÎHowever, the proposal was opposed by the hotel-owners on the ground that a market price-based premium was too exorbitant. They contended that the move will hit the industry in the metropolis and pointed out that no other state or municipal corporation was levying such a hefty premium.

Simultaneously, the cause of the hotels was also taken up by the Tourism department and the Maharashtra TourismDevelopment Corporation, which pleaded that it was essential to help the industry in view of the acute shortage of space in the metropolis.

As per official records, though additional FSI was granted to as many as 19 hotels between March 25, 1991 and August 31, 1997, only four establishments deposited the premium amount, and that too in parts. Initially, the Finance Department had opposed the proposal, saying at a juncture when the alliance government was facing acute shortage of funds, it would not be proper for it to grant concessions to star hotels.

However, subsequently, it amended its views and agreed for concessions proposed by the urban development department headed by Chief Minister Manohar Joshi.

Predictably, a section of the senior BJP as well as Shiv Sena Ministers have expressed strong displeasure over the decision. The mood was summed by one senior Sena minister who wondered: ``At a juncture when several major issues, including the on-going row over disposal of surplus land for revival ofsick and closed textile mills, were pending before the cabinet, what was the urgency to take up the cause of five star hotels?''