The Maharashtra cabinet has given its approval to the plan of acquiring the famous Air India Building located in Nariman Point in Mumbai. The state government will pay a total amount of Rs 1,601 crore to Air India Assets Holding Ltd, which was formed by the central government and has ownership of several Air India properties. This acquisition will provide the government with a total of 46,470 square meters of space across the 23-storey tower. The Air India Building is considered one of the landmarks of Mumbai. Currently, the building is occupied by tax departments under the Ministry of Finance, as well as some government-run organizations. Private companies, including Tata Consultancy Services, used to occupy the building as well. However, all current occupants will have to vacate the property to make way for government offices.
By acquiring the Air India Building, the Maharashtra government is expected to save approximately Rs 200 crore in annual rent. This is because the government will be able to relocate all its offices from private properties to the Air India Building. The property was previously leased to Air India for a period of 99 years starting from 1970. As part of the deal, the Maharashtra government has decided to waive transfer fees and penalties, which amount to approximately one-eighth of the market value of the property. This waiver has been granted to expedite the deal and allow the state to take possession of the building at the earliest. The negotiations for the acquisition started in 2018, with Air India initially valuing the building at over Rs 2,000 crore. The Maharashtra government offered a price of Rs 1,450 crore, but it was eventually settled at Rs 1,600 crore in 2022.
The acquisition of the Air India Building comes as the Maharashtra administration is facing a space shortage and needs to consolidate all its offices under one roof. In addition to the government, the Reserve Bank of India was also reportedly interested in buying the building. Deputy Chief Minister Devendra Fadnavis had met Civil Aviation Minister Jyotiraditya Scindia to urge him to consider the state’s bid favorably. The state had previously proposed this acquisition during Fadnavis’ tenure as Chief Minister, but it was withdrawn. Now, both the Reserve Bank and the Maharashtra government have demanded this space.
Air India had earlier attempted to sell the building through tenders in 2018, but it did not receive a favorable response. With the approval from the Maharashtra cabinet, the acquisition of the Air India Building will provide the state with a significant property for housing government offices and consolidate its operations in one location.
