Delhi: NDMC’s revenue from Taj Mansingh to double

NEW DELHI: Over six months after the public e-auction of Taj Mansingh hotel, New Delhi Municipal Council (NDMC) on Thursday signed a formal agreement with Indian Hotels Company limited (IHCL) of Tata Group. As per the agreement, NDMC will get 32.5% of gross turnover per month against 17.25% it was receiving earlier.
“The settlement of this deed is an achievement for us. Though the matter was in court for a long time, we were successful in planning the public auction, settling litigation, auctioning the property and finally implementing it on the ground after three years,” a senior NDMC official said.

NDMC will be earning double the revenue it used to get earlier from leasing the property. “The property has been given at a licence fee of Rs 6 crore per month or 32.5% of the gross turnover. IHCL used to pay Rs 3 crore per month before the e-auction. The amount may vary depending on the gross earnings of the company,” said the official.

Puneet Chhatwal, MD & CEO of IHCL, said that the company is delighted that the iconic Taj Mahal will continue to remain a part of the IHCL family. “The hotel has been an important part of the cultural and historic fabric of the national capital. We look forward to investing in the hotel and taking it to new heights of Indian hospitality,” he added.

After years of litigation, which had reached Delhi high court and then Supreme Court, IHCL retained the lease on the iconic property for another 33 years after winning the public e-auction on September 28, 2018 over its rival, ITC Hotels. IHCL and ITC were the only entities to participate in the bid.

“We held the public e-auction on the directions of the apex court and decided to charge licensing fees at current market rates,” said the NDMC official.

The hotel was given to Tata Group in 1978 on a 33-year lease, which ended in 2011. The company had since been given nine temporary extensions. Later, the civic body failed to auction the property as it was tied up in a legal battle with IHCL.