Mumbai: The Maharashtra government may soon take over the loss-making Air India’s iconic building at Nariman Point in Mumbai, in what is likely to be the first instance of the state buying back the land it had leased.
It has offered Rs 1,400 crore to take over the 23-storey property. While the offer is Rs 200 crore less than the building’s reserve price, sources told News 18 said the national carrier has decided to go ahead with it in order to monetise its real estate assets.
Maharashtra had leased the sea-facing property to Air India in 1970 for a 99-year tenure.
The carrier, which has run into debt worth Rs 50,000 crore, had first put up the sale of leasehold rights of the land and the building in December 2018. It had recently asked for an Rs 30,000-crore bailout package from the finance ministry, which was rejected.
The state-owned Jawaharlal Nehru Port Trust (JNPT) and the Life Insurance Corporation (LIC) had quoted Rs 1,375 crore and Rs 1,200 crore, respectively, for the property.
According to a report in Mumbai Mirror, it was on May 1 that UPS Madan, the state chief secretary, made the offer before Civil Aviation Secretary Pradeep Kharola and Air India’s Managing Director Ashwani Lohani, as well as placed the government’s terms and conditions for the sale. The state government wants the building to be vacated before occupying it, the report said.
The state’s ultimate goal is to merge its offices scattered across the city and operate them all from the Air India building. “There is a lack of space in Mantralaya and offices of the state secretariat operate from different locations at present. We’re paying high rentals for all these offices and face efficiency related issues. Once we take over the building, all these offices can be accommodated in once place,” said a senior state government official.
“We are looking to take possession of the building before June-end. Hopefully, things will go according to the plan,” the official added.
Meanwhile, Air India has requested for time to move its art collection to the National Gallery of Modern Art (NGMA). It has been in talks with the Ministry of Culture on the matter of preservation and the upkeep of over 2,000 artefacts.