New Delhi, March 17: The Taj group is set to face stiff competition from rivals such as ITC, Oberoi and other global majors for the Taj Mansingh hotel, following the Union home ministry's decision to clear the decks for the auction of the iconic property in Lutyens' Delhi.

The Taj Hotel Group (Indian Hotels Company Ltd of the Tatas), which had taken the property on lease from the New Delhi Municipal Council (NDMC) for 33 years, is unlikely to get the "first right of refusal" as the home ministry has ordered an open auction.

Though the initial lease had ended in 2011, the Taj group was granted temporary extensions to operate the hotel. The extended lease agreement will expire on March 31.

Analysts said losing the property would be a big blow to the Taj group both financially and strategically. They put Taj Mansingh's revenue at around Rs 190 crore annually.

"We have received directions from the home ministry to go for an open auction. We will place the matter before the council (NDMC's decision-making body) in the next meeting and start the auction process," said Jalaj Srivastava, chairperson of the NDMC, which works under the administrative control of the home ministry.

Though the NDMC had been in favour of giving the first right of refusal to the Taj group in case of an auction, the home ministry had argued that it might attract lower bids. "The MHA (ministry of home affairs) has ordered an open auction so they (Taj Group) might not get a right to refusal," Srivasatava said.

However, it will take some time before the auction can be initiated. NDMC officials said project consultant Ernst and Young had pulled out two months ago. A new assessment report of the property needs to be prepared and the entire process may take 6-8 months.

"We wanted to renew the contractor, but the consultants didn't agree. Now, we have to first look for a consultant who can assist us in the auction process," he said.

Analysts said this might give the Taj group time to initiate any legal action to retain the property. "The hotel chain is likely to pull out all stops to retain it (Taj Mansingh) as it is a key and marquee property in Delhi," said an executive of a consultancy firm.

Two years ago, when the NDMC had decided to auction the property, the Taj group had approached the Delhi high court seeking a stay. However, they did not manage to get it.

The NDMC is optimistic of increasing its revenue from the property manifold.