Poll code may extend Tata Group’s lease to run Taj Mansingh
A lease extension for the fourth time to run the Taj Mahal Hotel at Delhi’s tony Mansingh Road may be acquired by The Tata Group-owned Indian Hotels Company (IHCL), as the New Delhi Municipal Council (NDMC), the land-owning agency, cannot hold an auction once the model code of conduct for the general elections kicks in.
NDMC is expected to give the hotel a four-month lease as it won’t be able to go ahead with the global tender till the end of Lok Sabha polls and the six-month lease extension given to the hotel in October will expire on March 31.
An NDMC official said “The indecision over the lease row since 2011 with the model code of conduct coming into force any time soon will result in the extension of the lease till the parliamentary polls are over. The direction from the home ministry with regard to auctioning of the property is also awaited.”
The NDMC can seek a special permission of the Election Commission to auction the hotel in matters of urgency but officials said it is dubious that the council would do so.
After the ministry raised objections to this, the NDMC has been waiting for the home ministry’s directions on whether to give IHCL the first right of refusal.NDMC has to get directions from ministry based on the solicitor-general’s opinion.
The council had decided to auction the property in 2011 on expiry of the 33-year lease held by IHCL.
But it could not be done as IHCL moved the Delhi HC to get the stay on auction. The next hearing date is 16 April, IHCL has requested to renew the lease for another 30 years on revised commercials for which it is agreeable and even approached NDMC.
NDMC is not likely to revise what the company would have to share with it, which is 17.5% of gross revenue, in the newly-extended period. This was done in 2011 on expiring of the lease which was extended by a year. IHC paid 10.5% of its gross revenue to NDMC, proceeding to it.
Source: The Financial Express
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