While Chief Minister Manohar Joshi refused to reveal the exact amount, according to a senior official, the state exchequer would lose over Rs 80 crore due to the concessions which range from five to 25 per cent. The official revealed that five-star hotels and other agencies in Mumbai owe the government nearly Rs 300 crore by way of premium on extra-FSI.

Joshi said the proposal for drastic cut in the premium was brought before the cabinet by the Maharashtra Tourism Development Corporation (MTDC) and the Home Department following a demand made by a section of hotel industry.

Following acute shortage of space in the metropolis, the state government had taken a policy decision to grant additional FSI to hotels, schools and hospitals in 1991. After the Sena-BJP alliance came to power in March 1995, it decidedto levy premium on the beneficiaries of this decision. However, most of the hotels did not pay the premium amount and instead gave an undertaking to the government.

The Chief Minister was still hopeful that the Australia-based P & O International will reconsider its decision to withdraw from the Rs 4,000-crore Wadhawan port project.

``It is true that they have communicated to us in writing, but still I will try to convcince them to revoke their decision,'' Joshi told media persons after the weekly cabinet meeting on Tuesday.

When his attention was drawn to Sena leader Uddhav Thackeray's opposition to the project, Joshi reiterated that his government was keen on constructing the port at Wadhavan near Dahanu in Thane district.