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Model Code may help Tatas retain Taj Mansingh Hotel for more time

The decision to grant a four-month extension to  Indian Hotels Company Limited (IHCL) is likely to be taken during the next Council meeting to be held on March 19, NDMC officials said.

twitter-logo PTI   New Delhi     Last Updated: March 6, 2014  | 18:10 IST

The Tata-owned Indian Hotels Company Ltd is likely to get another extension to operate the iconic Taj Mansingh hotel in New Delhi after the current lease expires in March as New Delhi Municipal Council, the land-owning agency, cannot hold an auction with the Model Code of conduct for the Lok Sabha poll coming into force.

The decision to grant a four-month extension to  Indian Hotels Company Limited (IHCL) is likely to be taken during the next Council meeting to be held on March 19, NDMC officials said.

This would be the fourth time the IHCL will be getting an extension to operate the hotel  in posh Lutyens' Bungalow Zone.

The current extension, given in October last year, expires on March 31.

"We are waiting for the Solicitor General opinion on whether the Taj should get the first right of refusal in the auction. Once we get it, we start the process of auctioning the property in two months", an NDMC official said.

The opinion of the law officer was sought after there were divergent views on giving the first right of refusal to IHCL in case auction takes place.

While the Council was in favour of giving the first right of refusal, the Home Ministry was against it arguing that it may attract lower bids.

When the Home Ministry asked NDMC not to give IHCL the first right of refusal while auctioning the property, the civic body went to the Solicitor General to seek his opinion on it.

The matter is also in the court as IHCL has moved the Delhi High Court seeking a stay on the auction and the next date if hearing is April 16.

The property, constructed by NDMC, was given to Indian Hotels Company Limited in 1978 on lease for 33 years.

When the lease came to an end in 2011 and NDMC was about to renew the lease, the Urban Development Ministry intervened and asked it to auction the property.

As time was running out, NDMC gave a year's extension to IHCL.

While the company expected the lease to be renewed in October 2012, the process was stalled temporarily as NDMC could not take a final call.

The agency had again decided to give one-year extension to the Tatas, besides giving the first right of refusal in an auction to be conducted within one year i.e. in 2013.

But since the civic body was awaiting the Solicitor General's opinion on the matter, another extension of six months, ending in March 2014, was given to IHCL.

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