In a significant move, the Union government has given the green light to transfer ownership of the famed Air India building located in Mumbai to the Maharashtra state government. The transaction, valued at Rs. 1,601 crore, also includes the waiver of previous dues amounting to about Rs. 300 crore, as confirmed by an official familiar with the matter on Thursday.
The Department of Investment and Public Asset Management (Dipam) secretary, Tuhin Kanta Pandey, disclosed that the Centre has officially sanctioned the transfer of the Air India building to the Government of Maharashtra. This decision marks a pivotal development in the state’s real estate landscape and underscores the government’s commitment to facilitating such strategic transactions.
The state government has reciprocated by agreeing to waive dues totaling Rs. 298.42 crore, which would have otherwise been payable by AI Assets Holding Ltd (AIAHL) to the Government of Maharashtra in connection with this transaction. AIAHL, a special purpose vehicle (SPV) established in 2018, was tasked with overseeing the management of residual non-core assets of Air India, subsequently acquired by the Tata group in 2022.
Following a protracted five-year effort to privatize the debt-ridden national carrier, Tata Sons emerged as the successful bidder, acquiring Air India for Rs. 18,000 crore in October 2021. The transfer of ownership was finalized on January 27, 2022, marking a significant milestone in the aviation sector.
The SPV, wholly owned by the central government, was established to manage non-core assets, including subsidiaries such as 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 residual assets, including the Air India building in Mumbai, were valued at Rs. 14,718 crore.
It is anticipated that the Maharashtra state government will utilize the iconic building to accommodate its administrative offices, adding further value to the property. Previous reports had indicated keen interest from entities like the Jawaharlal Nehru Port Authority (JNPA) and the Life Insurance Corporation (LIC) of India in acquiring the building.
Constructed in 1974 by the renowned architectural firm Johnson/Burgee, the 23-storey Air India building boasts a sprawling 46,470 square meters of space, situated on land owned by the Maharashtra government. In 2019, the Maharashtra government had bid Rs. 1,400 crore for the building, while other entities like JNPA and LIC had also expressed interest in acquiring the property. However, following a revision in bids by the state government in 2022, the final transaction was agreed upon at Rs. 1,601 crore, signaling a new chapter for the historic landmark.
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