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The New Delhi Municipal Council (NDMC) will, in a council meeting, discuss issues linked to the proposed auction of Taj Mahal Hotel on Friday. NDMC has received the go-ahead from its parent body, the Union home ministry, to auction the hotel colloquially referred to by the road on which it is located (Mansingh Road).
Taj Mansingh’s current lease is due to expire on March 31, 2015. Indian Hotels Company Limited (IHCL), which operates the property, will not get the right of first refusal, it is learnt. The home ministry has ordered an open auction, which is likely to attract Indian as well as global bidders. However, another lease extension of about six months is possible before the auction.
“The Ministry of Home Affairs has instructed us that the hotel should be auctioned. We will take up the issue formally on March 20, when we have the next council meeting," said Jalaj Srivastava, chairman, NDMC.
IHCL had earlier filed an injunction in the Delhi High Court to get a stay on the proposed auction, claiming equity in the hotel property's construction. While the land and property belong to NDMC, IHCL had signed a 33-year lease agreement for managing the property. That lease expired in October 2011, after which auctioning of the property was due. There have been six lease extensions since then, the most recent being awarded on January 31 and to last till March 31.
“It will be decided in the council meeting about the period of the next extension. Another six months extension is likely since the bidding process will take at least six to eight months,” said Srivastava.
He added the process of selection of the bid process manager was likely to take three months, following which the auction would be taken up. The previous consultant for the project, EY, had pulled out after its contract expired two months ago.
“Since NDMC doesn’t have the necessary experience to go for an auction process of this complexity alone, hand-holding is required. So we have to hire new consultants to assist us in the process, for which we will invite bids first,” said Srivastava.
Taj Mansingh’s current lease is due to expire on March 31, 2015. Indian Hotels Company Limited (IHCL), which operates the property, will not get the right of first refusal, it is learnt. The home ministry has ordered an open auction, which is likely to attract Indian as well as global bidders. However, another lease extension of about six months is possible before the auction.
“The Ministry of Home Affairs has instructed us that the hotel should be auctioned. We will take up the issue formally on March 20, when we have the next council meeting," said Jalaj Srivastava, chairman, NDMC.
IHCL had earlier filed an injunction in the Delhi High Court to get a stay on the proposed auction, claiming equity in the hotel property's construction. While the land and property belong to NDMC, IHCL had signed a 33-year lease agreement for managing the property. That lease expired in October 2011, after which auctioning of the property was due. There have been six lease extensions since then, the most recent being awarded on January 31 and to last till March 31.
“It will be decided in the council meeting about the period of the next extension. Another six months extension is likely since the bidding process will take at least six to eight months,” said Srivastava.
He added the process of selection of the bid process manager was likely to take three months, following which the auction would be taken up. The previous consultant for the project, EY, had pulled out after its contract expired two months ago.
“Since NDMC doesn’t have the necessary experience to go for an auction process of this complexity alone, hand-holding is required. So we have to hire new consultants to assist us in the process, for which we will invite bids first,” said Srivastava.
