The global advisor is to first evaluate the properties and subsequently find the highest bidder for the five properties in India. HCI operates two five star hotels in Mumbai, one in New Delhi and Srinagar each and a four star property in Rajgir, Bihar. The advisor will have to take care of the entire legal and financial issues involving the sale of the hotel chain.

HCI's privatisation is crucial to Air India's survival as the proceeds of sell-off will be used to clean the airline's balance sheet written in red ink. The airline needs around Rs 6,000 crore to pay off its expensive short term debts of about Rs 1,100 crore and expand its fleet.

Though HCI itself is losingmoney, its properties are situated in the prime locations in both New Delhi and Mumbai. In fact, its Mumbai properties alone could fetch Rs 1,000 crore each, but due to a fall in real estate prices, the airline may not be able to get a good price on them.

The bidders are to submit their request for appointment as global advisors by end of this month. The company, which was turned around by former managing director Kamal Sharma, has slipped into red again. Some of the major problems faced by the company are over-staffing, militant unions, and an unprofessional management. The unions have already announced that they will oppose any attempt by the government to privatise the company.

Officials say that if everything goes as per schedule, Air-India will be able to disinvest 100 per cent of the equity to a private partner by the end of the financial year. As most of the political parties have arrived at a consensus on the need to privatise the public sector units (PSUs), the forthcoming elections will nothamper the HCI privatisation drive, they add.

At the same time, the government has asked Air-India to finalise a partner who will pick up 40 per cent equity in the company. The government has asked Air-India to freeze its expansion plan until it can bring in a partner who will take a final decision on the expansion of the fleet.