Mumbai: New Delhi’s Taj Mansingh luxury hotel goes under the hammer on 19 June, with the city’s municipal council announcing a fresh date for the long-delayed auction.
Starting 18 May, potential bidders can submit bids for the 292-room five-star hotel currently operated by the Indian Hotels Co. Ltd (IHCL), a New Delhi Municipality Council (NDMC) notice said on Wednesday.
The last auction plan was scrapped after criticism that the tender terms kept many potential bidders out of the fray.
The previous tender restricted bidders to Indian hoteliers operating five-star hotels with at least 500 rooms. The new one opens the door to bidders other than hotel owners too, with the condition that they must have a hotel partner with at least 700 rooms. All bidders should have annual revenue of over Rs400 crore.
Financial investors are still not allowed to bid on their own. Nor are foreign entities.
Last year, the Supreme Court allowed NDMC to auction the Taj Mahal hotel on Mansingh Road, rejecting IHCL’s claim over the property. IHCL, which runs the Taj chain of hotels across the country and abroad, had taken the property on a 33-year lease that expired in 2011. The Tata group company got several temporary lease extensions subsequently.
NDMC had earlier planned to auction the property on 10 January. However, several large hotel operators including EIH Ltd which runs Oberoi hotels, and K Raheja Corp had raised issues over the stringent eligibility criteria at a meeting in New Delhi on 27 December.
On 15 January 15, Mint reported that the restrictive bid terms are likely to stall the auction. Apart from IHCL, large hotel chain operators including ITC Ltd, EIH and K Raheja Corp. Ltd had submitted expressions of interest for operating the property.
Along with the Taj hotel, NDMC has also put on fresh tenders to auction two other hotels - The Connaught hotel at Shaheed Bhagat Singh Marg and Hotel Asian International on 1, Janpath Lane in New Delhi. While the 85-room Connaught Hotel would be auctioned on 20 June, Hotel Asian International will be auctioned on 21 June.
“Opening up the bid process to more entities is a welcome step. However, in our earlier interactions with NDMC (last round), there were several queries raised by the bidders regarding approvals, FSI and changed building byelaws. Those remain unanswered and the entire process is being re-started. NDMC should have provided the answers to those questions," said Saurabh Gupta, managing partner (investment advisory and asset management) at Hotelivate, a consulting firm.