The New Delhi Municipal Council (NDMC) announced on Wednesday that it will begin the process to auction three hotels on prime property, including the Taj Mansingh, since their licences expired in September.
After a special council meeting chaired by Chief Minister Arvind Kejriwal, who is the New Delhi MLA, the NDMC unanimously passed the proposal to auction the properties at 1, Mansingh Road (Taj Mansingh Hotel); 37, Shaheed Bhagat Singh Road (The Connaught); and 1, Janpath Lane (Hotel Asian International).
33-year lease
The hotels will be auctioned for a period of 33 years for which a licence fee will have to be paid.
The licence for the Taj Mansingh, which had been given to Indian Hotels Co. Ltd. in 1976 for 33 years, had expired in 2011, but the company was given many extensions. After the matter went to court, the NDMC was given approval from the Supreme Court to auction the premises on April 20, 2017.
Terms and conditions
After the meeting on Wednesday, NDMC vice-chairperson Karan Singh Tanwar said the terms and conditions for the e-auction had been framed in order to ensure a fair and healthy competition.
The minimum amount for the e-auction would be 17.25% of the gross revenue.
Apart from that, the minimum guarantee fee will be linked with the annual Wholesale Price Index.
The NDMC had already appointed SBI Capital Market Ltd. as its transaction advisor for the e-auction.
The e-auction itself will be conducted through MSTC Ltd, a public sector undertaking.
According to officials involved in the process, the tender is likely to be floated this month, after which it will take about 60 days for the bids to come in.
