State could clear acquisition of Air India building for 1,600 crore today...

Story by Yogesh Naik Wednesday, November 8, 2023

MUMBAI: The state government’s decision to buy the iconic Air India building at Nariman Point for ₹1,600 crore is expected to be cleared by the state cabinet in its meeting on Wednesday. The building was constructed in 1974 on land owned by the state government.

After the 2012 fire at Mantralaya, four major departments—public health, medical education, water supply and sanitation, and rural development—have been operating from GT Hospital. These departments, along with others, will be shifted to the Air India building. Officials said that many entities were vying for the property.

The 23-storey building is owned by Air India Assets Holding Limited, a company created by the union ministry of civil aviation in 2018 to manage all Air India-owned properties. Nine floors of the building are vacant at present. Three floors house GST offices while the income-tax department has eight floors. The ground and first floors are currently with Air India, and the government has communicated to Air India Assets Holding Company that it should hand over the building free of encumbrances.

According to sources, the BJP feared that if the building was sold to a private entity, it would invite criticism, and hence the party wanted a government body to buy it. The Centre-owned Jawaharlal Nehru Port Authority (JNPA) and the Life Insurance Corporation (LIC) of India were also in the fray earlier but finally the Maharashtra government’s bid came out tops.

In 2019, the state bid ₹1,400 crore for the building, while JNPA bid ₹1,375 crore and LIC ₹1,200 crore. After the Eknath Shinde government assumed office in June 2022, the state government revised the bid to ₹1,600 crore against Air India’s asking price of ₹2,000 crore. JNPA and LIC have not amended their offers.

Deputy chief minister Devendra Fadnavis chaired two meetings on the issue, the last one on November 5. He said that the state government would convey its intent to the Centre.

In a meeting at Mantralaya on May 1, 2019, UPS Madan, the then state chief secretary, had placed the government’s terms and conditions before the then civil aviation secretary Pradeep Kharola and Air India’s then managing director Ashwani Lohani. At the time, Air India wanted to retain the topmost floor along with the logo. That will now be relegated to history, given the state’s firm condition of full ownership.

A towering city icon

One of Mumbai’s iconic buildings, the sea-facing Air India tower came up on state government-owned land at Nariman Point in 1974. It was built by John Burgee of the New York-based architectural firm Johnson/Burgee. Burgee was known for his contribution to post-modern architecture.

The building was one of the targets of the 1993 Bombay bomb blasts—a car bomb exploded in the basement garage, killing 20 people and destroying the offices of the Bank of Oman located above. The thirteenth floor of the building remains unoccupied to date because of superstition.

The 23-storey building was put up for sale in 2018 as part of Air India’s asset monetisation plans. It has an area of 4.99 lakh square feet, two basements and a tunnel.