The lease of the iconic Taj Palace Hotel, which expires on March 31, has been renewed for 25 years, sources said.
The Taj Palace Hotel near Sardar Patel Marg is being run by the Tata Group’s Indian Hotels Company (IHC) on a 30-year lease from the Delhi Development Authority (DDA). The lease expires on March 31.
The company had written to the DDA in September last year, saying that it was interested in renewing the lease.
Senior DDA officials said that the lease had been renewed for another 25 years.
The lease agreement was passed by DDA’s finance department after scrutiny and sent to Lieutenant-Governor Tejendra Khanna, who is also the DDA chairman, for final approval. “The approval came from the L-G office on Monday,” the official said.
“The contract with IHC has a clause that allows it to seek an automatic renewal of the lease. We carefully scrutinised all documents to find if there is any default on their part or violation of contract,” he said. “Since we didn’t find any default on their part during the tenure of the lease, the agreement was cleared for renewal.”
DDA officials had earlier said that if they found any fault on part of IHC, they would have gone for a fresh bidding, in which case, the company would have faced a stiff competition from rivals.
The authority and IHC have been fighting out for more than 15 years and arbitration is still going on over the terms of payment and calculation of gross revenues. DDA officials, however, said that the arbitration has had no effect on the renewal process.
The IHC is also fighting to keep control over the Taj Mahal Hotel, Mansingh Road, which stands on New Delhi Municipal Council (NDMC) land. IHC’s 33-year lease with NDMC expired in 2011 but was extended first up to 2012 and again extended to September 2013.