Air India is set to sell the carrier’s iconic building in Mumbai’s Nariman Point for Rs 1,600 crore. Air India Assets Holdings Limited (AIAHL), which was created to manage Air India’s debt and resources following its acquisition by Tata Group in January 2022, will sell the tower to the Maharashtra government. The company had previously refused a proposal made by the state administration, livemint has reported.
The publication quoted an anonymous source saying that “the fresh offer by the Maharashtra government has been accepted, and the process is on within the government to clear the sale. The final approval will come from the ministerial group (headed by Union home and cooperation Minister Amit Shah)”.
Currently, the investment and public asset management department is assessing the fresh bid for the 23-storey building. In the past, several entities, including Life Insurance Corporation of India (LIC) and Jawahar Lal Nehru Port Trust had shown interest in the property. However, Air India (then a state-owned airline) could not sell it despite making concerted efforts since 2018.
The Government of India took over the airline’s debt of Rs 45,000 crore and roughly 111 properties (all non-core assets) as part of its divestment plan of Air India. The estimated value of these properties, which include the office building and housing colonies, was Rs 14,718 crore, according to a 2021 government statement.
As part of the divestment move, it was decided that assets whose land rights belonged to government departments or state governments would be sold to that entity. The land rights for the sea-facing Nariman Point building belong to the Maharashtra government. The administration had given it on a 99-year lease to Air India in 1970.
Maharashtra state’s interest in the commercial tower is understandable. The government is short of space for its departments. The Air India building could become a part of the government secretariat. It is located close to the administrative headquarters of the state which was built in 1955.
So far, it has taken four rounds of e-auctions to sell off most properties with clear records. A couple more high-profile buildings are undergoing the monetisation process.
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