Mumbai: Maharashtra government offers Rs 1400 crore for Air India building in Nariman Point
The state's offer is Rs 200 crore less than the reserve price the national carrier had set, Air India has decided to go ahead with the offer as a part of its plan to monetise its real estate assets
The iconic Air India building in Mumbai might soon be the new address for offices of the Maharashtra secretariat as the state government has offered the national airline Rs 1,400 crore to take over the property. According to the sources, though the state’s offer is Rs 200 crore less than the reserve price the national carrier had set, Air India has decided to go ahead with the offer as a part of its plan to monetise its real estate assets. Life Insurance Corporation (LIC) had quoted Rs 1,375 crore and the Centre-run Jawaharlal Nehru Port Trust (JNPT) has quoted Rs 1,200 crore for the property.
The national carrier, Air India is under the debt of Rs 50,000 crore and had put up the sale of leasehold rights of the building and the land in December. Maharashtra government had leased the property to the national airline for a 99-year tenure in 1970. The LIC submitted a quote during the first round of bidding, prompting a second round but the state government used its status as the land’s owner to invoke the “first right to refusal” condition before edging past JNPT stating only government entities were permitted to participate.
According to the India Express, talks were also held between Civil Aviation Secretary Pradeep Kharola, Maharashtra Chief Secretary U P S Madan and Air India’s managing director Ashwani Lohani last week and further negotiations took place. “If everything goes as planned, we may take possession before June-end,” said a senior state government official.“We have asked Air India to ensure there is no renewal of rental agreements after the expiry of the current period. Due to a paucity of space in Mantralaya, offices of the state secretariat operate from various locations currently. We’re paying high rentals and face efficiency related issues. All these offices can be accommodated in the Air India building,” Madan said.
The national carrier, Air India has also sought time to move its art collection to the National Gallery of Modern Art (NGMA) which was previously situated in a 9,000-square feet space on the first floor in the Air India building.
"With Air India keen to retain its 5,000-square feet booking office on the ground floor, the government has said it can exist on a rental basis. Air India will be allowed to display its logo on the top of the building even after the acquisition," said Madan.
Stories of the day
Sign up for all the latest news, top galleries and trending videos from Mid-day.comSubscribe