The New Delhi Municipal Council (NDMC) on Monday gave the Tata-owned Indian Hotels Company (IHCL) another extension of six months (till March 31, 2014) to operate the Taj Mahal hotel in the capital's tony locality Mansingh Road.
The one-year extension given to IHCL last year was to expire on October 10.
This is the third extension given to the IHC.
The council is waiting for the solicitor general's opinion on the modalities of the auction to find a new operator.
The council had decided to auction the property in 2011 on expiry of the 33-year lease held by IHCL.
But it could not do so because the IHCL moved the Delhi high court.
Earlier this year, the home ministry wrote to NDMC saying that the first right of refusal shouldn't be given to IHC as it will lower the bid.
The council then decided to seek the solicitor general's opinion.
“The code of conduct has already been implemented in the wake of state elections which are to be held on December 4. So, the council thought that it was feasible to give a six month extension. After which we'll roll out the auction process. We did not want to take any decision in a hurry,” the NDMC spokesperson said.
Karan Singh Tanwar, BJP MLA and member of NDMC, has alleged that it's tactic of the council to give another extension to the IHC.
IHC has not got stay from the court on the auction of the property and the next hearing is in November.
The home ministry has also issued a show-cause notice to the Council on why the civic body was delaying the auctioning of the hotel property for the last two years despite getting a directive on the matter NDMC is expected to reply to the notice by the end of this month.
IHC has held that the lease should be renewed for another 30 years on revised commercials for which it is agreeable and even approached NDMC.
In the newly-extended period, NDMC did not revise what the company would have to share with it, which is 17.5% of gross revenue.
This was revised in 2011 when the lease expired and was extended by a year.
Prior to it, IHC paid 10.5% of its gross revenue to NDMC.