NDMC to auction iconic Taj Mahal Hotel on January 30
, ET Bureau|
Dec 09, 2017, 12.49 AM IST
The New Delhi Municipal Council (NDMC) has kickstarted the process of auctioning the iconic Taj Mahal Hotel in the Capital, setting January 30 as the date for the sale.
The 33-year licence agreement envisages a minimum of 17.25 per cent of the gross revenue and a minimum guarantee fee of Rs 2.96 crore, subject to escalation, to be paid by the successful bidder to NDMC, according to the tender document accessed exclusively by ET.
The successful bidder is expected to pay an upfront non-refundable fee of Rs 53.4 crore to the municipal body.
NDMC will issue a letter of award to the successful bidder on February 14 and will execute the definitive documents by August 13, according to the document.
The Supreme Court allowed NDMC in April to invite bids for the Taj Mahal Hotel at No. 1, Mansingh Road, which had been run by the Tata Group's hospitality arm Indian Hotels Company Ltd for about four decades. IHCL had said it will participate in the auction.
Among the eligibility criteria, bidders must own or operate under their own brands not less than 500 rooms in a maximum of five hotels or resorts with at least a fivestar rating for a minimum of five years.
Alternatively, they should have an average turnover of Rs 400 crore and above in the past three financial years from hotel or resort operations and a net worth of at least .`300 crore as per the audited accounts for 2016-17. NDMC has adopted a two-stage competitive bidding process — technical bids and initial price offers followed by financial bids of those who qualify.
The qualified bidder offering the highest price will be declared the "successful bidder" immediately on conclusion of the e-auction.
The highest initial price offer among the technically qualified bidders will be the floor for the second round. The technically qualified bidders will be ranked in the descending order of their initial price offers and the first 50% or top five will qualify for the second round.
The 292-room landmark hotel built on land measuring 3.78 acres is owned by NDMC and was given to IHCL in 1978 on a 33-year lease. After the lease expired in 2011, IHCL has operated the hotel on a series of temporary extensions.
The 33-year licence agreement envisages a minimum of 17.25 per cent of the gross revenue and a minimum guarantee fee of Rs 2.96 crore, subject to escalation, to be paid by the successful bidder to NDMC, according to the tender document accessed exclusively by ET.
The successful bidder is expected to pay an upfront non-refundable fee of Rs 53.4 crore to the municipal body.
NDMC will issue a letter of award to the successful bidder on February 14 and will execute the definitive documents by August 13, according to the document.
The Supreme Court allowed NDMC in April to invite bids for the Taj Mahal Hotel at No. 1, Mansingh Road, which had been run by the Tata Group's hospitality arm Indian Hotels Company Ltd for about four decades. IHCL had said it will participate in the auction.
Among the eligibility criteria, bidders must own or operate under their own brands not less than 500 rooms in a maximum of five hotels or resorts with at least a fivestar rating for a minimum of five years.
Alternatively, they should have an average turnover of Rs 400 crore and above in the past three financial years from hotel or resort operations and a net worth of at least .`300 crore as per the audited accounts for 2016-17. NDMC has adopted a two-stage competitive bidding process — technical bids and initial price offers followed by financial bids of those who qualify.
The qualified bidder offering the highest price will be declared the "successful bidder" immediately on conclusion of the e-auction.
The highest initial price offer among the technically qualified bidders will be the floor for the second round. The technically qualified bidders will be ranked in the descending order of their initial price offers and the first 50% or top five will qualify for the second round.
The 292-room landmark hotel built on land measuring 3.78 acres is owned by NDMC and was given to IHCL in 1978 on a 33-year lease. After the lease expired in 2011, IHCL has operated the hotel on a series of temporary extensions.
