New Delhi: Tata-owned Indian Hotels Company Limited (IHCL) has received another extension to continue operations of the Taj Mansingh hotel here after its current lease agreement expired last week as New Delhi Municipal Council or NDMC cannot hold an auction with the model code of conduct currently in force.
"The council has decided to give a two-month extension till March 31 to the IHCL for operating Taj Mansingh," NDMC chairperson Jalaj Srivastava told PTI.
"Taj's lease has been extended so that once the model code is lifted, we can put the wherewithal in place for the auction process to begin," Mr Srivastava said.
The current lease of the hotel expired on January 31. NDMC is yet to finalise the terms for auctioning the hotel property. Also, the civic body has never before auctioned any functional hotel.
"It is complicated to try and auction off a functional property since it is very difficult to arrive at the correct value," the top official said.
While the land on which the 11-storeyed hotel came up belongs to NDMC, IHCL has signed a 33-year lease agreement for managing the property.
This is the sixth temporary extension to the IHCL to continue operations of the hotel here in Lutyen's Bungalow Zone after its lease agreement with NDMC ended in October 2011.
While the Council was in favour of giving the first right of refusal to IHCL in case an auction took place, the Home Ministry argued that it may attract lower bids.
When the Home Ministry asked NDMC not to give IHCL the first right of refusal, the civic body approached Solicitor General seeking his legal opinion.
Mr Srivastava said a final decision on the auctioning issue will be taken after receiving the Solicitor General's opinion as well as directives of the Union Home Ministry.
"So, till this extended lease will expire, we will take a call on the matter considering all the opinions," he said.
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