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NDMC gets MHA nod to auction Taj Mansingh

The property, owned by the NDMC, was given to Tata-backed Indian Hotels Company Limited (IHCL) on lease for 33 years. The lease had ended in 2011 and the IHCL was given six temporary extensions to operate the hotel since then on various grounds.

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The iconic Taj Mansingh Hotel in the heart of the national capital will go under the hammer soon with New Delhi Municipal Council (NDMC) initiating proceedings after getting a go-ahead from the Union Home Ministry for its auctioning.

The property, owned by the NDMC, was given to Tata-backed Indian Hotels Company Limited (IHCL) on lease for 33 years. The lease had ended in 2011 and the IHCL was given six temporary extensions to operate the hotel since then on various grounds. The last extension was given on January 31 as NDMC could not hold an auction because of the Model Code of Conduct for the Delhi Assembly elections. The extended lease agreement expires on March 31.

"The MHA has recently given us a clear verdict that Taj (Mansigh Hotel) ought to be auctioned so we will be taking up the issue formally before the council on March 20," NDMC chairman Jalaj Srivastava said. The NDMC works under administrative control of the Union Home Ministry.

While the NDMC was in favour of giving the first right of refusal to IHCL in case an auction took place, the Home Ministry had argued that it may attract lower bids. "The MHA has ordered an open auction so they might not get a right to refusal," Srivasatava said. The bidding process, however, is likely to take around 6-8 months after the Council initiates the proceedings.

"The consultant for the project Ernst and Young who were handholding us in the bid management process had pulled out three months ago and we do not have experience within NDMC to go for an auction process of this level and complexity," Srivastava said.

"It will be decided in the council meeting when to go ahead with the process, how many months of extension should be given to them till the process is over and what will be the guidelines for the auction of high-value items. Once the council has taken a call on all these issues, we will float a Request for Proposal (RFP) inviting bid process managers to assist us though the process. We are also expecting global bids," he added.

Srivastava said that the process of selection of the bid process manager is likely to take three months time following which the auction will be taken up.

Two years ago, when the NDMC had decided to auction the property, the IHCL had approached the Delhi High Court seeking a stay on the process. However, the company had not got a stay order from the court to restrain the NDMC from auctioning the hotel. 

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