NEW DELHI: The stage is set for two of India’s biggest hospitality players — Tata ’s Taj Hotels and ITC Group — to have a battle royale over the iconic Taj Mansingh . While Taj will go all out to retain its flagship Delhi property that it has been famously running since 1978, for ITC, it will be a chance to have another feather in its Delhi cap.

The New Delhi Municipal Council on Thursday altered the bidding norms for Taj Mansingh after three failed auctions this year. It has now decided that the auction can happen with two bidders (instead of three earlier) with a gross turnover of Rs 350 crore each (Rs 400 crore earlier).

While the e-auction schedule will be announced soon, sources say the process may start as soon as the first week of September.

Whether the relaxations in norms will throw up some more bidders remains to be seen. Oberoi Group, which recently spent Rs 600 crore on renovating its flagship property in Delhi, did not comment on whether it will bid for Taj Mansingh. Taj and ITC also did not comment on the latest changes.

The auction for this prime property, which was leased out to Taj for 33 years in 1978, was first supposed to take place in January. But strict eligibility norms ensured it was a non-starter. The second auction was then scheduled for June 19, but only one eligible bid was received from Tata Group’s Indian Hotels Company with ITC’s bid not being accepted due to technical reasons. The third date was July 18, but, this time only, two bids — from ITC and Taj — were received.

“SBICAPS had suggested few dilutions in a bid to carry out successful auction. However, the members of the council approved two dilutions and the remaining were not approved citing security reasons,” a senior NDMC official said.

A lease period of 33 years means that very strong players can eye this property. Because if someone else gets the property, Taj will strip the hotel bare and take out everything like elevators and electric fittings. Refurbishing a hotel of this size will take at least two years and, then, making it fully operational will take another year.

NDMC has to be given a minimum guarantee fee of about Rs 3 crore per month in the first year by the new operator, an amount that rises every year. So, in the first three years itself, the new operator will pay over Rs 100 crore as minimum due to NDMC. Adding the investment made, it gives it less than three decades to recover the funds pumped in.

