New Delhi: The Union government has opted to transfer ownership of the iconic Air India building in Mumbai to the Maharashtra state government for Rs.1,601 crore. Additionally, it has waived old dues payable to the state, totaling around Rs.300 crore. This decision was disclosed by an official familiar with the matter on Thursday.
“The Centre has greenlit the transfer of the Air India building in Mumbai to the Government of Maharashtra (GoM) for a sum of Rs.1,601 crore,” stated Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (Dipam).
Additionally, the state government has agreed to waive dues amounting to Rs.298.42 crore, which would have been payable by AI Assets Holding Ltd (AIAHL) to the Government of Maharashtra (GoM) for this transaction,” he added.
AIAHL, the special purpose vehicle (SPV) established on January 22, 2018, was tasked with owning and managing residual non-core assets, including paintings and artefacts, of the state-run Air India, which was subsequently acquired by the Tata group.
After a five-year struggle to privatize the debt-laden airline, the government accepted Tata Sons’ bid for its flagship carrier at Rs.18,000 crore in October 2021. The ownership of the airline was transferred on January 27, 2022.
The SPV, wholly owned by the central government, was established to manage accumulated working capital loans not backed by any asset, along with four subsidiaries: Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL), Air India Engineering Services Ltd (AIESL), and Hotel Corporation of India Ltd (HCI). The non-core assets, including the land and the building, were valued at Rs.14,718 crore.
The new owner is expected to utilize the building for housing its offices. According to a report by HT on November 8, 2022, the building attracted interest from various entities, including the Jawaharlal Nehru Port Authority (JNPA) and the Life Insurance Corporation (LIC) of India. Constructed in 1974 on land owned by the Maharashtra government, the 23-storey building offers 46,470 square meters of space.
In 2019, the Maharashtra government tendered a bid of Rs.1,400 crore for the building, while JNPA offered Rs.1,375 crore and LIC proposed Rs.1,200 crore. Following the assumption of office by the government led by Chief Minister Eknath Shinde in June 2022, the state government adjusted its bid to Rs.1,600 crore, compared to the company’s initial request of Rs.2,000 crore, as per the report. The building was designed by John Burgee of the architectural firm Johnson/Burgee based in New York.