Why is Mumtaz Hotel in Tirupati under scrutiny after TTD board meeting?

Mumtaz hotels project, proposed to be constructed in Tirupati's Peruru Village, is back in news. Newly appointed TTD chairman BR Naidu said the board will ask the Andhra Pradesh government to cancel the lease given to develop a luxury villa resort.

The newly appointed board of the Tirumala Tirupati Devasthanams (TTD), at its first meeting presided over by chairman BR Naidu, passed several resolutions on Monday, at the Annamayya Bhavan in Tirumala.

Several key decisions, including cancelling controversial resolutions passed by the previous boards under the previous YSRCP government, were made by the newly constituted TTD governing council.

The board passed a resolution asking the state government to cancel allotment of 20 acres of land near Alipiri to build Mumtaz Hotel, as it is hurting the sentiments of devotees.

Irked by the allotment of land for the proposed hotel, TTD chairman BR Naidu urged the Andhra Pradesh government to return the land.

At the TTD governing council meeting, Naidu said: “Whatever land of 25 acres was given by the tourism department, Chandrababu Naidu had earlier wanted to start a project called ‘Devalokam’. But now, after those documents changed hands, there were plans to construct a five-star hotel named ‘Mumtaz’. As it is en route to Tirumala, on account that it might hurt the sentiments of Hindus, we discussed clearly and TTD has taken a decision to request the government to hand over the lands to TTD.”

WHAT IS THE HOTEL PROJECT?

A Government Order (GO) passed in 2021 by then YSRCP-led Andhra Pradesh government, a large-scale luxury tourism project was proposed to be developed through incentives under the state government’s 2020-2025 Tourism Policy.

The plan was to boost tourism and local employment in Tirupati. Under the GO, the developer, i.e. Mumtaz Hotels Ltd. which is a subsidiary of The Oberoi Group, would receive subsidies and tax benefits, for which the government facilitated permissions to make the project more viable.

According to the GO, the project would feature 100 luxury villas on 20-acre land with an initial investment of Rs 250 crore.

The project, with an employment potential of about 1,500 jobs, would feature multi-cuisine, fine-dining restaurants, conference and banquet facilities with other amenities such as a coffee shop, bar and lounge, spa and fitness centre, and a swimming pool.

LEASE AND INCENTIVES

The GO stated that the land would be leased for 90 years, with an additional four years allowed for construction. The lease cost, as per the GO, would start at 1 per cent of the land’s official value per year, with a 5 per cent increase every three years.

The GO also provided benefits such as no extra charge for converting land for commercial use and the developer would get full reimbursement of stamp duty fees paid when leasing land.

Apart from that, the GO stated that the project would receive a 100 per cent refund of the net State Goods and Services Tax (SGST) it generates for five years or until the project recouped its investment, whichever happened first.

There was also an electricity subsidy provided for five years with only Rs 2 per unit charge for up to 18.25 lakh units per year.

The project itself would be recognised as an industrial entity, which would likely get it further benefits.

The GO also stated that the state government would assist in fast-tracking permits and approvals to simplify project execution.

This is not the first time the proposed luxury hotel project has been under scrutiny. Many religious groups and individuals in Andhra Pradesh have raised the issue on various social media platforms, saying a project such as this would hurt religious sentiments and the sanctity of the Seven Hills.