The New Delhi Municipal Council (NDMC) is expanding the eligibility criteria for bidders in the auction of the Taj Mahal Hotel to include owners and investors after the previous attempt to lease out the property failed.

The auction was initially restricted to companies that owned and operated hotel brands. The changes may allow entities such as Goldman Sachs-backed SAMHI Hotels and individual hotel owners to participate. NDMC officials said they will recall the old tender and issue a fresh one for the auction.

“The tender has lapsed. A new tender will be issued after the approval of the council. Brand owners as well as property owners and investors will be allowed under the new eligibility criteria,” said an official familiar with the developments. No new dates have been announced yet for the auction.

Originally scheduled for January 30, the auction for the hotel located near India Gate at 1, Mansingh Road in the capital, was first postponed to February 7, then to February 21 and again to March 7.

While potential investors welcomed the changes, they were cautious about other terms.

“We welcome the move to include hotel owners and investors. However, the deal terms proposed last time had a high degree of risk for financial returns. We will evaluate the changes to the terms, which may give some comfort to incoming investors,” said Ashish Jakhanwala, CEO of SAMHI Hotels, which owns properties operated by Hyatt, Marriott and other international brands.

“The move, if implemented, broadens the investor base but the economics will not add up for investors if some of the other deal terms are not changed. If they make it a longer lease, from 33 to 60 years, the values could go up. The investors who expect high returns on a leased asset may not want to pay high money if they feel they will not be able to recover it,” said a hotel owner.

The original tender offered a 33-year lease with a minimum 17.25% revenue share. Bidders were required to own and operate not less than 500 rooms in a maximum of five hotels or resorts under their own brands with a minimum 5-star rating. Each hotel or resort should have had at least 100 rooms operational for five years preceding the submission of the technical bid or an average turnover of Rs 400 crore and above in the past three financial years from hotel or resort operations and a net worth of at least Rs 300 crore.

The Tata Group’s Indian Hotels Company has operated the hotel since 1978 on a 33-year lease. The company continues to run the hotel after a series of temporary extensions. The Supreme Court last year allowed NDMC to auction the property.

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