The Andhra Pradesh government’s efforts to find a private operator for the controversial Rushikonda Palace complex in Visakhapatnam have hit a roadblock, with no major hospitality company coming forward to take up the property despite the government pitching it as a potential international-standard luxury tourism destination.
The sprawling beachfront complex has remained largely unused for more than two years since its construction during the previous YSR Congress Party government.
The state is also incurring about Rs 7 crore annually on its maintenance, according to Tourism Minister Kandula Durgesh.
Speaking to reporters in Rajahmundry on Saturday, Durgesh said the government had invited private players to operate and commercially utilise the complex under a public-private partnership (PPP) model, but the proposal had failed to attract a final taker.
“Major hospitality companies are currently unwilling to take over the Rushikonda Palace buildings because the large room sizes do not suit standard hotel operations,” he said.
The minister attributed the design of the complex to the previous government’s decision to construct it primarily for the “personal luxury” of former chief minister Y S Jagan Mohan Reddy rather than with commercial hospitality requirements in mind.
The lack of a private operator comes despite the Andhra Pradesh Tourism Development Corporation (APTDC) inviting expressions of interest on July 3 from hotel chains, hospitality operators, resort developers, infrastructure companies and investors for the operation, maintenance and commercial utilisation of the property.
The government had proposed converting the Rs 452-crore complex into a luxury hospitality destination following recommendations made by a Cabinet sub-committee headed by Finance Minister Payyavula Keshav.
The plan was aimed at generating tourism activity while retaining public access to portions of the property.
Several reputed hospitality companies, including Taj, Atmosphere Core, Leela and Fema, were reported to have inspected the property and shown preliminary interest. However, none ultimately came forward to take up the project.
The absence of a taker leaves the government facing the immediate challenge of finding a commercially viable use for a high-value property that has remained largely idle since its completion.
With the state continuing to spend crores of rupees every year on its upkeep, the government must now decide whether the existing structures can be suitably modified for hospitality use or whether an alternative tourism-oriented model should be explored.
