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Monday, Nov 08, 2004

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The castle riddle

K.G. Kumar

THESE are politically difficult days for the ruling United Democratic Front (UDF) Government led by Mr Oommen Chandy. Buffeted by scandals of all kinds, the UDF finds itself with little time or inclination to tackle the real problems of Kerala's citizenry and the several developmental challenges confronting the State. More charitable observers would perhaps shrug aside this impasse in governance as a necessary evil that is an inalienable part of any functioning democracy.

Yet, the true test of a government and its leadership is how they behave in a crisis. As the cliché goes, when times get tough, the tough get going. However, the present UDF seems sorely bereft of toughies, going by the several important decisions left unmade.

Take the case of the disputed Halcyon Castle at the Kovalam beach resort, which the State Government took over on September 27 from M-Far Hotels Pvt Ltd. The hotel group had acquired possession of the palace when it bought the adjoining Kovalam Ashok Beach Resort, then belonging to the India Tourism Development Corporation (ITDC), which sold it as part of its disinvestment plan. To date, no one is quite sure who legally owns the palace.

Some say that the castle and the adjacent 17.4 hectares were transferred by the then Managing Director of Kerala Tourism Development Corporation (KTDC) on behalf of the State Government to the Union Government on October 23, 1970.

The Hindu reports that the castle and the adjoining land were acquired by the State Government from the Settlement Palace, owned by the former Regent Sethu Lakshmi Bai, in the 1960s for an integrated project to develop Kovalam at a cost of Rs 5.50 lakh. The acquisition was effected on the basis of the Union Ministry of Tourism and Civil Aviation's letter of March 26, 1970, sanctioning Rs 9.50 lakh to the State Government for the transfer of the castle and the land. The State Government, however, did not bother to correct the revenue records after acquiring the land, it is claimed.

The Government Order of September 25, 2004 taking over the castle and property states that "the terms and condition of the transfer has not yet been finalised by the State and Union Governments," according to The Hindu. The property has been in "permissive possession" of the Union Government, with the result that the title of the property remains with the State Government and the possession with the Union Government.

The management of the ITDC property was transferred to M-Far Hotels on July 11, 2002. However, M-Far Hotels, which bought the resort for Rs 44 crore, claims that 25.78 ha were handed over to it. It is said that ITDC had sold the entire complex - measuring approximately 26.1 hectares, including the castle, three swimming pools, the Rajiv Gandhi Convention Centre, the restaurant and the conference hall - to the private group.

Property disputes are common in Kerala. But this is in a totally different league altogether. Soon after taking over as Chief Minister, Oommen Chandy had promised to take steps to resolve the dispute over the ownership of the Halcyon Castle. That he has not been able to do so speaks much of the power of vested interests.

During the takeover of the hotel, the General Manager of the Le Meredien Kovalam Hotels said that the manner in which the local administration had acted would deter future non-resident Indian investments in the State as well as drastically affect the impending tourist season.

He may have been exaggerating, spurred by the emotion of the moment. But the entire episode and the continuing uncertainty of the legal status of a prime property in the capital of a State that is eager for industrial investments, smacks of amateurism and impropriety.

The writer can be contacted at

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