NEW DELHI: The consultant advising New Delhi's municipal body on the process of maximising returns from the property that houses the iconic
Taj Mahal Hotel at
Mansingh Road has recommended the Tatas should have the right to match the highest bid in an open auction, possibly setting the stage for an intriguing bidding drama and paving the way for auctions of other hotel properties.
A person privy to the contents of the interim report submitted by New Delhi Municipal Corporation's transaction advisor Ernst & Young said the consulting firm has proposed an open auction to select the operator, who would run the property on a 30-year lease. The report has recommended that the Tata-owned
Indian Hotels Company, which currently operates the property, should be given the right of first refusal or the option of matching the highest bid.
NDMC Chairman Archana Arora said Ernst & Young had submitted the report, but declined to divulge details. An Ernst & Young spokeswoman declined comment on the matter.
The land on which the hotel, popularly called
Taj Mansingh, is situated is owned by the NDMC. It was built by Indian Hotels but the construction was funded by the municipal body. The
Tata Group company has operated it on a 33-year lease, which expired last year, and was extended till October 2012. The hotel company pays the municipal body 10.5% of its gross revenue annually and the proposed auction could result in a substantial increase in this revenue share figure.
International hotel group
Accor has said it would be interested in the upcoming auctions.
MANY PARTIES MAY BE INTERESTED IN AUCTION "Accor is aware about NDMC considering auctioning a hotel at Mansingh Road in central Delhi in the next few months. Since there are very few opportunities left in central Delhi, if such an opportunity was confirmed we would definitely look at it and put a bid for it," said Jean-Michel Casse, senior vice president-India operations of the French hotel company.
Subrata Roy, chairman of the
Sahara Group, had told ET in a recent interview the group would bid for the property if there was an auction. There has also been speculation about a top Indian business house being interested in the property, though this could not be confirmed.
