Maharashtra govt offers Rs 1400 cr for iconic Air India building in Mumbai

Maharashtra govt offers Rs 1400 cr for iconic Air India building in Mumbai: Soon, Mumbai’s iconic Air India building may possibly be the new address for workplaces of the Maharashtra secretariat. In what is maybe the first occurrence of the state purchasing back land it had rented, the government has presented the national carrier Rs 1,400 crore to take over the property.

However the state’s offer is Rs 200 crore less than the reserve amount Air India had fixed, sources said the national carrier has decided to go forward with it as part of its strategy to monetise its real estate assets.

The Centre-run Jawaharlal Nehru Port Trust (JNPT) as well as the Life Insurance Corporation (LIC) had estimated Rs 1,375 crore and Rs 1,200 crore, individually, for the property.

Air India, which has been into controversy in the recent months had run into debt of Rs 50,000 crore and the first step they had put up is the sale of leasehold rights of the land and the building last December. Maharashtra had rent out the sea-facing property to the carrier in the year 1970 for 99 year’s occupancy.

For the period of the first round of bidding, only the LIC stand up to a quote, stimulating a second round. On the other hand the state government used its status as the land’s owner to appeal the “first right to refusal” situation before edging former JNPT. Only government bodies were allowed to take part in both rounds.

Discussions were also held in the middle of Maharashtra Chief Secretary U P S Madan, Civil Aviation Secretary Pradeep Kharola as well as Air India’s managing director Ashwani Lohani last week where additional talks took place. A senior state government official said, “If everything goes as planned, we may take possession before June-end.”

The state’s ultimate goal is to combine its offices dispersed across the city and function 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.

The official further added, “We are looking to take possession of the building before June-end. Hopefully, things will go according to the plan.”

On the other hand, it may well be over two years in advance the government can use of maximum of the floors. After the airline’s head office were moved to Delhi in the year 2013, approximately 5 lakh square feet of office space on 17 of the 23 floors in the Mumbai building was lent out.

Madan said, “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.”

In the meantime, Air India has requested for time to transfer its art collection to the National Gallery of Modern Art (NGMA). It has been in discussions with the Ministry of Culture on the matter of protection and the maintenance of more than 2,000 artefacts.