New Delhi Municipal Corporation(NDMC) has decided to appoint Ernst & Young as the new transaction advisor to select a partner for operating the property that currently houses the iconic Taj Mahal Hotel in Lutyens' Delhi. 

"The decision to appoint a new advisor was taken after the original consultant - Infrastructure Development Finance Company (IDFC) - which was hired as transaction advisor in December, withdrew due to possible conflict of interest," said a senior official in the NDMC. The possible conflict of interest arose because IDFC chairman Deepak Parekh also happens to be a board member of Indian Hotels Ltd. as per a report in ET by Arun Kumar.

The Tata-owned Indian Hotels has been in charge of the iconic property on Mansingh Road since 1978 under a 33-year agreement with the NDMC, the owner of both land as well as the building. The lease expired in October 2011 and was renewed in favour of Indian Hotels on a short-term basis for one year. "Ernst & Young, one of the leading global consultancy firms, is to suggest the current market value of the property through a proper price discovery mechanism," said the official. 

"We have selected Ernst & Young, which was second lowest bidder as it had quoted Rs 57.4 lakh. IDFC had quoted a fee of Rs 19.3 lakh," he added. Spokespersons for Ernst & Young and IDFC declined comment. An NDMC spokesperson did not respond to an email query. 

ET had on January 4 reported about NDMC tasking IDFC with the responsibility of developing a private-public partnership structure that would optimise revenues for the municipal body and assist it in finalising a private sector partner A person close to Tatas had then said Indian Hotels Company has sought an extension of the collaboration agreement and licence deed between NDMC and IHCL in respect of the Taj Mahal Hotel. 

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