The Tata-owned Indian Hotels Company Ltd (IHCL) has got a three-month extension for operating the Taj Mansingh hotel with the New Delhi Municipal Council (NDMC) gearing up to complete its auction of the property by then.
The matter was placed before the NDMC council today at a special meeting ahead of the presentation of its budget for the next financial year.
"Home Ministry had issued a directive to us that the hotel ought to be auctioned. I had placed the matter before the Council, which has instructed me to complete the auction proceedings within three months and Taj Mansingh has been given an extension to continue its operations till then," said NDMC Chairperson Jalaj Srivastava.
The property, owned by NDMC, was given to IHCL on lease for 33 years.
The lease ended in 2011 and the company has been given six temporary extensions since then on various grounds.
The last extension was given on January 31 as NDMC could not hold an auction due to the Model Code of Conduct in place for Delhi Assembly elections. The current lease agreement, which expires on March 31, has now been extended till June 30.
"This is the final extension given to Tata's and we will have to rush the proceedings. I will also be presenting a weekly report to the Council on the progress made in this context," he said.
NDMC has also planned to invite bid process managers to assist it in the auctioning process after the consultant for the project, Ernst and Young, pulled out in November last year.
"We do not have experience within NDMC to go for an auction process of this level and complexity, so we will be inviting proposals for Transaction Advisors, whose selection is likely to be completed within a month's time," added Srivastava.
Two years ago, when NDMC decided to auction the property, IHCL had approached Delhi High Court seeking a stay on the process.
However, the company did not get a stay order for restraining NDMC from auctioning the hotel. NDMC works under the administrative control of the Union Home Ministry.
After getting the go-ahead for the auction, its Council was scheduled to have taken a call on the matter on March 20, but that decision was deferred to today.
Photograph courtesy, Taj Mahal Hotel