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Only 5-star Operators can Bid for Taj Mahal Hotel in Delhi

Thursday, December 14, 2017, 14:00 Hrs  [IST]

As per a report in The Economic Times, real estate developers, budget hotel chains, private equity and sovereign wealth funds and anyone who doesn’t own or operate five-star hotels will not be able to bid for the management rights of the Taj Mahal Hotel in New Delhi as the bidding conditions disqualified them. Global hotel chains that are not yet present in India do not stand a chance as bidders too, as the definition of a bidder means a company incorporated under the Companies Act, 1956/2013 and in existence for at least three years, as per New Delhi Municipal Council’s (NDMC) tender document released for the e-auction. According to industry executives, quite a few hotels and entities that had previously expressed interest in bidding for the property now stand excluded from the e-auction to be held on January 30.

The eligibility criteria for bidding for the 33-year lease agreement include the following as per the document: The bidder itself should own or operate in the immediately preceding five years continuously from the date of submission of the technical bid, in aggregate not less than 500 operational rooms, in maximum five hotels/ resorts having a minimum 5-star rating, with each having at least 100 operational rooms. If bidding alongside an affiliate, the bidder itself should own and operate immediately preceding five years from the date of submission of the technical bid at least three hotels/ resorts having a minimum 5-star rating, with each such hotel/resort having 100 operational rooms. Further, only such an entity that was an affiliate of the bidder prior to the date of publication of the notice inviting tender will be considered. The definition of an affiliate shall mean a company in which the bidder holds more than 50% shares or voting rights. NDMC officials stated that the five star hotel experience criteria was put in place to only invite relevant hospitality companies for bidding for the five star property and to also prevent any attempts at money laundering and black money investments through dubious sources.

 
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