Taj Mansingh: Caught in lease tangle

The fate of the Taj Mahal Hotel, New Delhi, popularly known as 'Taj Mansingh', hangs in the balance. One of the names that defines hospitality in the city, the hotel stares at the prospect of operating under a new owner.

The lease period for the land on which the hotel stands is over, and a month remains before the current lease, extended by a year, runs out.

The prospect of auction has groups such as Accor and Sahara in the fray while Indian Hotels Company (IHC) is battling to retain control of the property.

With the Union urban development ministry suggesting fresh bids for the property, the New Delhi Municipal Council (NDMC), from whom the land was leased under an agreement, had engaged Ernst & Young as a consultant to advise on the modalities to be followed once the lease period is over, and whose report is with the municipal body to be acted upon.

GENESIS

In 1976, NDMC, with an objective of developing tourism in the Capital city before the Pacific Area Travel Association (PATA) Conference of 1978 and to boost its own revenues decided to develop a five star hotel as per the standards laid down by Central government.

The municipal body made a request to what was then known as the Union Ministry of Works and Housing for a plot of land measuring 3.78 acres located at 1, Mansingh Road in New Delhi. It was around this time that the ministry was approached by IHC for this plot. The Union government's Land and Development Office allotted the plot to the NDMC.

Being a municipal body, NDMC did not have the experience or expertise in setting up and running a five star hotel. IHC's offer to the NDMC of developing a hotel as a joint venture project was taken up at the meeting of the civic body's council. With time ticking away for the conference, and considering that IHC was a leading player in this field, the council entered into an agreement with the hotelier. The plot was allotted to IHC in July, 1976.

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