ITC Hotels has hit the audit hurdle for its luxury hotel proposed in Bhubaneswar.

The Comptroller & Auditor General of India (CAG) has pulled up the Odisha general administration (GA) department for allotting 5.12 acres land to ITC Sonar Bangla Sheraton Hotels & Towers-Kolkata without ascertaining land use zone.

Though the land site was earmarked for horticulture use with restriction in construction up to 10 metres in height, the land was leased out to the hotel developer in violation of land use zone plan, pointed out the CAG report.

It may be noted, the Bhubaneswar Development Authority (BDA) had declined to allot the land in favour of ITC since it was meant for horticulture. The GA department, however, overruled the BDA direction and went ahead with land allotment disregarding zonal regulations.

Besides, the GA department also charged premium at a lower rate of Rs 35 lakh per acre against the market value of Rs 1.5 crore. This resulted in a loss of Rs 5.90 crore. According to the CAG report, the land was still vacant (as on June 2012).In reply to audit, the GA department stated in January 2013 that the land was allotted to ITC on the basis of recommendations of the site selection committee in which planning member of the BDA was a member.

The CAG did not find the reply to be tenable as deviation from zoning regulation on the basis of the individual views of Planning member- BDA cannot be the basis for carrying out changes in land use plan per se since it creates scope for arbitrariness.

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