The 33-year lease for the hotel, awarded by NDMC to Indian Hotels Company Limited (IHC) ended in October 2011. The civic agency then granted a one-year extension to IHC, buying itself time to chart out the next course of action.
The NDMC also engaged Ernst & Young as a consultant to advise on the modalities to be followed once the lease period is over. Listing out various options, E&Y said the most profitable choice for the NDMC would be to allow IHC to continue as the operator.In the light of the advice, sources said the first right of refusal will be given to IHC.
A source said the RFP is scheduled to come up for disussion in the meeting of the Council on April 10. "The tendering process for the hotel will begin as soon as the Council gives its approval to the proposal. We have drawn up detailed terms and conditions documents," the source said.
Earlier, while E&Y had suggested that IHC would be the most beneficial option for the civic agency, the legal advice from Additional Solicitor General Rakesh Kumar Khanna opposed extension to IHC and proposed auction of the property.The Taj Mahal Hotel was started in 1976, when NDMC, with an objective of developing tourism in the capital before the Pacific Area Travel Association conference of 1978 and to boost its own revenues, decided to develop a five-star hotel as per the standards laid down by the Central government.
Being a municipal body, NDMC did not have the experience or the expertise in setting up and running a five-star hotel. IHCs offer to the NDMC of developing a hotel as a joint venture project was taken up and later approved by the civic agency.