Outlook English - Print Subscribers Copy Outlook English, 18 June 2018 | Page 22

F I V E - STAR AUCT ION
by Arindam Mukherjee
TRIBHUVAN TIWARI
ever, has gone through many
twists and turns. The UPA
government kept the issue
FTER many duels bet­
hanging without giving a clear
ween the Tata Group
verdict, and the subsequent
and civic authorities,
BJP-led government too was
in court and outside,
initially silent. It seems no one
the stage seems to be
really wanted to antagonise
set for the auction of
the Tatas, a leading ind­ustrial
Delhi’s most iconic five-star
group and one of the biggest
property, the Taj Mahal
inv­estors in Gujarat.
Hotel. Recently, the Delhi
­
At stake is a property that
High Court dismissed a plea
has generated public interest
by the Indian Hotels Comp­
because of its prime location
any Limited (IHCL), the
as well as the revenue it can
Tata Group company that
generate for the government.
runs the hotel, which chal­
Over the last few decades or
lenged the revised tender of
so, say officials, the Taj Mahal
the auction. IHCL had app­
Hotel has been the biggest
roached the Delhi High
contributor by far to NDMC’s
Court, challenging the rev­
revenues among the seven
ised tender by the New Delhi
hotels under it, and has never
Municipal Council (NDMC)
def­aulted in payments. Acc­or­
on the grounds that it failed
NO HARDSELL The fate of the hotel on Delhi’s Man
ding to the agreement, IHCL
to take into account IHCL’s
Singh Road had been uncertain for seven years
had to pay 10.5 per cent of its
“blemish free” record in run­
revenues annually to NDMC
ning of the hotel as observed
during the 33-year lease. In
by the Supreme Court earl­
2012, the NDMC appointed
ier. Incidentally, the Sup­
consultants Ernst & Young to
reme Court has now refused
evaluate the situation. In its
to interfere in the process
report, E&Y also gave an opin­
laid out by NDMC for the
ion in favour of the Tatas.
­hotel’s auction.
Under the revised tender
The high court’s current dec­
document, NDMC has all­
o­
ision has paved the way for
wed cross-holding of up to 20
auction of the property on
A duel between the Tatas and others for
per cent in hotel chain. This is
June 19, when e-auctions for a
Delhi’s Taj Mahal Hotel is on the cards
up significantly from the ear­
new licence for the property
lier five per cent. This will
will be held. The last date for
also bring in groups like ITC, which has
submission of technical bids is June 7. unanswered till going to the press.
Obviously, the Tata Group desper­ cross-holding in its rival EIH Limited
The Taj Mahal Hotel, more popularly
known as Taj Man Singh as it is located ately wants to keep its hold over the (the Oberoi Group). The tender also
on Man Singh Road in the heart of the property as it is not just iconic, but also states that the bidder must have a
city, has been a favourite meeting place one of the group’s most profitable. The turnover of Rs 400 crore in the last
for industrialists, politicians, journal­ lease of IHCL’s other hotel in Delhi, three years. While there were a lot of
ists and, of course, the ubiquitous fixers the Taj Pal­ace, ended in similar cir­ interested parties for the iconic hotel
of Delhi. For the past seven years, how­ cumstances in 2012 and was renewed earlier, now with the revised condi­
ever, the future of this hotel has been without a sniff. In the Taj Bengal Hotel tions, the race has been narrowed
uncertain and caught between intense case in Calcutta, the SC allowed the Taj down. This includes ITC, EIH, K
Group to continue on the property Raheja Corp and IHCL. The Accor
political play and litigation.
group, which has a tie-up with
The lease of the hotel ended in October after negotiations.
The Man Singh Road property, how­ Interglobe in India, may be one of the
2011. Since then, the case has been
overseas contenders.
tossed around between NDMC, which
Once the bids come in this week, it
owns the property, and its parent minis­
Over the last few
will be clear who all are in the ring. The
try, the Ministry of Home Affairs. The
Taj Group has made it amply clear it
hotel’s iconic status is because of the
decades, the Taj Mahal
will go to any length to keep the hotel.
efforts of the Taj Group, which devel­
has been the biggest
But others are equally serious to lay
oped it over the past 33 years and made
contributor by far to
their hands on this prime property. It
it into a brand with a value much more
than the group’s other hotels in Delhi. NDMC’s revenues among depends on how much IHCL is willing
Outlook’s queries to IHCL remained the seven hotels under it. to stretch itself not to check out. O
A
FINALLY,
A TIME TO
CHECK OUT
22 OUTLOOK 18 June 2018