The Centre on Thursday approved the transfer of the Air India building in Mumbai of Air India Assets Holding Company Limited, a company created by the Ministry of Civil Aviation in 2018 to manage All India-owned properties, to the Maharashtra government at a consideration of Rs 1,601 crore.
The Maharashtra government has agreed to waive DIPAM dues worth Rs 298.42 crore, which would have been payable otherwise by AI Assets Holding Company Ltd for the transaction, according to the Department of Investment and Public Asset Management (DIPAM).
The development comes months after the Maharashtra government decided to acquire the iconic Air India building in Mumbai’s Nariman Point at a cost of Rs 1,601 crore. The decision was taken at a Maharashtra government cabinet meeting chaired by chief minister Eknath Shinde.
It was also decided to waive off roughly Rs 250 crore unrealised income and interest on the property at the time. The land is on a 99-year lease given to Air India in 1970. The cabinet has waived transfer fees and penalties to fast-track the deal.
This move is expected to save the government around Rs 200 crore per year in rent. Constructed in 1974 on the land owned by the state government, the building will be utilised for its office space.
Nearly 46,470 square metres will be available for government offices in the 23-storey building owned by AI Assets Holding Company Limited. Current occupants of the building, including tax departments and government-run undertakings, will have to vacate.
Negotiations, which started in 2018, were initially unsuccessful, but resumed in 2021. The final agreement was reached in 2022 when the Maharashtra government made a final offer of Rs 1,600 crore.
Deputy Chief Minister Devendra Fadnavis met with Civil Aviation Minister Jyotiraditya Scindia to discuss the state’s bid. The Reserve Bank of India was also reportedly interested in purchasing the building.
Fadnavis stated that the state administration needed more space. Air India, burdened with debt, had tried to sell the building in 2018 but received a lukewarm response. One of Mumbai’s iconic buildings, the sea-facing Air India tower, came up on state government-owned land in 1974.
It was built by John Burgee of the New York-based architectural firm Johnson/Burgee. Burgee was known for his contribution to post-modern architecture.
