Centre nulls move to give Tatas priority in Delhi's Taj Mansingh auction

The New Delhi Municipal Council has decided to seek the opinion of the solicitor general of India on the future of the luxury Taj Mansingh Hotel in central Delhi, whose 33-year-old lease ran out in 2011. The land and building belong to the NDMC.

"The Council will soon seek the Solicitor General's opinion on the issue through the MHA and the UD ministry," spokesperson for the NDMC A K Mishra said on Thursday.

This move came after the union home ministry turned down a proposal by the NDMC that the Tatas-owned Indian Hotels Co (IHC), which runs the Taj Mansingh, should be given the right of first refusal in the upcoming auction.

Instead, it has asked the Delhi municipal body to conduct an open auction.

In a letter to the NDMC dated 10 May, the home ministry said, ''The proposal to allow IHCL to have the first right of refusal in the public auction has not been provided for in the lease deed. A provision of first right of refusal will result in lower bids in the public auction. Therefore, the ministry of home affairs is of the opinion that … a fresh lease should be granted by open public auction."

The letter was signed by A K Das, undersecretary in the ministry of home affairs. It stated that the opinion had the approval of the home secretary.

At least one NDMC member, Karan Singh Tanwar, seems opposed to the civic body's moves. He reportedly said there was no reason to seek an opinion, since the additional solicitor general as well as the union home and urban development ministries had already given their opinion. "This is an attempt to delay the process," he said.

The home ministry's views are important since it is the administrative ministry for the municipal body, which has to find a new operator for the hotel by October this year.

A spokeswoman for the Indian Hotels Company Ltd declined to comment as the matter is sub judice.

The 33-year lease for the Taj Mansingh ended in October 2011 after which the civic body decided to extend the lease with the existing operator for one more year. During this period, the civic body had appointed Ernst & Young to value the property and to find a way forward.

E&Y, in its report, suggested auctioning the property, with the first right of refusal granted to the Tata group.