The Tatas should prepare for war. With the backing of Mukesh Ambani as a ‘shareholder and friend’, EIH Chairman PRS Oberoi has made it clear that the Oberoi Group will bid for the iconic Taj Mansingh Hotel in central Delhi, which is currently run by the Tatas under a lease agreement that expires on 20 October.
With the Union development ministry suggesting fresh bids for the property, the New Delhi Municipal Corporation is currently studying a report by Ernst & Young, which has reportedly suggested an open auction of the property, and recommended that the Tatas be given the option to match the highest bid.
AFP
As per the agreement signed between the Tatas’ Indian Hotels and NDMC,the joint venture lasted 33 years, i.e. up to 10 October 2011. On 15 February 2010, IHC applied for extension of the agreement but NDMC only extended the lease till 10 October 2012 .
Last month, The Economic Times had reported that ITC, which always wanted to overtake Indian Hotels as the country’s largest hotel chain, wants to explore the opportunity to participate in the auction too, but only if the reserve price made sense.
France’s Accor and Subrata Roy’s Sahara India Parivar, Lucknow, India are also reportedly interested in competing for the new lease, but with the Supreme Court ruling on the latter, at least one competitor is out of the picture for sure.
Given the hotel’s prime location and the number of moneybags who are waiting in the wings, it remains to be seen whether NDMC will give another temporary extension to Taj until it takes a final call on the property.
