Mumbai’s iconic Air India building might soon be the new address for offices of the Maharashtra secretariat. In what is perhaps the first instance of the state buying back land it had leased, the government has offered the national carrier Rs 1,400 crore to take over the property.
While the state’s offer is Rs 200 crore less than the reserve price Air India had set, sources said the national carrier has decided to go ahead with it as part of its plan to monetise its real estate assets.
Air India, which has run into debt of Rs 50,000 crore, had first put up the sale of leasehold rights of the land and the building last December. Maharashtra had leased the sea-facing property to the carrier in 1970 for a 99-year tenure.
During the first round of bidding, only the LIC submitted a quote, prompting a second round. The state government used its status as the land’s owner to invoke the “first right to refusal” condition before edging past JNPT. Only government entities were permitted to participate in both rounds.
Air India, meanwhile, has also sought time to move its art collection, situated in a 9,000-square feet space on the first floor, to the National Gallery of Modern Art (NGMA). It has been in talks with the Ministry of Culture on the matter of preservation and the upkeep of over 2,000 artefacts.
With Air India keen to retain its 5,000-square feet booking office on the ground floor, the government has said it can exist on a rental basis. Air India will be allowed to display its logo on the top of the building even after the acquisition, said Madan. When contacted, Lohani declined comment.