The hotel, likely to come up by 2010, will be pitched as one of the poshest properties in the segment and will cater not just to foreigners wanting to inhale the sights and sounds of purani Dilli but also traders and businessmen visiting the area for work.

The Town Hall, conceived by the British soon after the 1857 rebellion and completed in 1866, will no longer be the MCD headquarters after the corporation shifts to the 27-storey City Centre being built on Jawaharlal Nehru Marg. The new office is expected to be ready by December this year.

``With MCD shifting its offices, ITDC will take possession and undertake a major renovation of the Victorian building that has become dilapidated over the years. The work should be complete by 2010,'' an official said. Sources estimate that room rent in the heritage hotel is likely to be about Rs 9,000 a night.

However, congestion and poor connectivity could put the project in jeopardy. Chandni Chowk and its neighbourhood -- being the wholesale market for the city -- are plagued with problems of clogged traffic that have worsened over the years. Power, water and sewerage facilities have also not kept up with the growing population.