The Taj group of hotels has bagged the contract for renovating and running Rail Yatri Niwas, the well-known Delhi budget hotel owned by the railways, on a 15-year lease.

As part of the deal with the Indian Railway Catering and Tourism Corporation, which currently runs it, the Taj group will renovate the Yatri Niwas and add food courts within the complex.

The makeover will be done on a redesign-operate-manage-transfer basis. The hotel will be run under the Taj group's budget hotel brand, Ginger, which has hotels in Mysore, Bangalore, Thiruvananthapuram, Haridwar and Bhubaneshwar.

Confirming the development, a railway official said, "The contract with Taj is part of our attempt to upgrade all our four Rail Yatri Niwas hotels located in Delhi, Howrah, Ranchi and Puri."

Explaining that the Taj group was awarded the hotel as part of IRCTC's bidding process, Prabhat Pani, CEO, Ginger Hotels, said the hotel would be closed for renovation once it was handed over.

IRCTC has also awarded contracts for renovation, upgrade and running of its Yatri Niwas in Ranchi and Puri to the BNR group.

The Hotel Meghalaya group has bagged the contract for renovating and running the Yatri Niwas at Howrah. IRCTC also awarded the bids for setting up budget hotels at 11 locations to the private sector yesterday under the build-operate-transfer scheme.

US-based Signet Hotel group has bagged contracts for setting up budget hotels in Ooty, Kanyakumari, Jaisalmer and Rameshwaram.

The Zoom-Royal Orchid consortium has also bagged four locations - Darjeeling, Bikaner, New Jalpaiguri and Tirupati.

The Subhash Chandra-owned GL Hotels group has won contracts for Mumbai, Madurai and Sealdah. These hotels are expected to come up in the next one year.

IRCTC has charged a six-month security deposit of Rs 1-2 crore (Rs 10-20 million) from each player against a 30-year lease. The deals are to be on a 70:30 revenue-share basis in favour of the concessionaires.

The names of the hotels are to be decided in tandem with the players through co-branding. The railways had initially planned to call them Rail Ratnas.

In the second phase, IRCTC plans to award contracts to private players to set up and run budget hotels in eight new locations by the end of the month. The locations are Udaipur, Agra, Jodhpur, Chandigarh, Pune, Vijaywada, Nagpur and Secunderabad.

These hotels are to come up on vacant land near railway stations for passengers.

• A private reception
• Yatri Niwas will be renovated and food courts added
• Work will be on a redesign-operate-manage-transfer basis
• The hotel will be under Taj's budget hotel brand Ginger
• Taj group has a 15-year lease