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NDMC seeks coal ministry advice on Taj Mansingh e-auction

New Delhi Municipal Council (NDMC) usually deals with the allotment of shops, offices, petrol pumps, taxi stands and phone booths. It has a less mundane and more challenging task at hand now. With the deadline for the auction of the marquee Taj Mansingh hotel nearing, NDMC wants to replicate the success of the coal ministry's bidding for mines. The municipal body has asked the ministry to share the experience of the coal block e-auction process, after series of lease extensions to the Taj hotel on the Mansingh Road in the capital through more than two years.

Earlier, the coal ministry had consulted the telecom ministry ahead of its bidding for mines, impressed by the latter's successful 3G spectrum auction conducted a few years ago.

In a letter, reviewed by Business Standard, NDMC has asked the coal ministry to guide the municipal body on auctions and share its experience with Metal & Scrap Trading Corporation (MSTC). MSTC concluded India's first coal e-auction a month ago, awarding 40 blocks that would accrue mineral-rich states Rs 2.95 lakh crore over three decades.

MSTC participated in NDMC's tender process to act as a transaction advisor for auctioning Taj Mansingh. The previous consultant for the project, EY, pulled out after its contract expired over two months ago. The sale of the hotel has been grabbing headlines for over two years now, with seven extensions granted amid a legal battle.

"Yes, we have approached the ministry of coal to ask about MSTC's credentials and their [coal ministry's] experience," said NDMC Chairman Jalaj Shrivastava. "MSTC had approached us and offered to guide us in the auction process for Taj Mansingh. We wanted to ascertain their performance and requisite expertise in the recent coal block e-auctions, so we in turn approached the coal ministry."

The coal ministry is expected to respond to NDMC's request sometime this week. Though it will not be the official transaction advisor, it is keen on helping NDMC. "We are looking at sharing our experience of successfully conducting the e-auctions and what the overall process entails," said a senior coal ministry official.

Indian Hotels had earlier filed an injunction in the Delhi High Court to get a stay on the proposed auction, claiming equity in the hotel property's construction. While the land and property belong to NDMC, Indian Hotels signed a 33-year lease agreement for managing the property in 1978. That lease expired in October 2011, after which the property was due to be auctioned.

Taj Mansingh's current lease, its seventh extension, is due to expire on June 31. The home ministry had ordered an open auction to attract Indian as well as global bidders, to generate a potentially higher value of bids.

source: http://www.business-standard.com