NDMC to re-auction Taj Mansingh, retains several conditions of first tender

Prospective bidders can make a site visit to the hotel between June 16 and 22. The agency will conduct a pre-bid meeting on June 25. The last date for submission of bids is July 9

Last Updated : Jun 18 2018 | 8:06 AM IST

After an unsuccessful first attempt at auctioning Delhi’s iconic luxury hotel, Taj Mansingh, civic body NDMC has decided to invite bids once again. It has fixed 18 July 2018 as the next date for e-auction, according to an advertisement on its website. However, most of the conditions of the first tender seem to have been retained by NDMC.

Prospective bidders can make a site visit to the hotel between June 16 and 22. The agency will conduct a pre-bid meeting on June 25. The last date for submission of bids is July 9. On June 7, the date for submission of bids in the previous unsuccessful round, NDMC received a single bid from current operator, Indian Hotels Company Ltd.

According to the clause of the first tender, the auction could be held only if the agency received three technically qualified bids. This criterion of three minimum qualified bids has been retained in the latest re-tendering process. The lease period, which was 33 years in the first tender, has not been changed as well. The bid security amount of Rs 250 million, too, is unchanged.

NDMC has retained most of the financial terms from the previous tender. The next operator of this property will have to assure a minimum revenue share of 17.25 per cent and a minimum guarantee fee of Rs 29.64 million per month, with a clause for escalation. There is also an upfront non-refundable fee of Rs 533 million. NDMC is seeking a performance security of Rs 355 million as well.

The cold response from the hotel industry to the first auction was unexpected, especially at a time when the sector is seeing an uptrend. Representatives of hotel companies said they were not enthused with the financial terms and certain conditions of the tender. In spite of a relaxation in certain conditions in the second tender floated by the NDMC in April, a number of hotel companies failed to qualify. Some said the responses to queries raised by prospective bidders in a pre-bid meeting were not satisfactorily answered.