Maharashtra Govt in Talks to Buy Air India Building: What is its Significance?
The Maharashtra government has resumed talks to buy the Air India tower, one of Mumbai's most iconic skyscrapers.
The Maharashtra government on Tuesday, 10 July, engaged in renewed discussions with Air India Chief Managing Director Rajiv Bansal over the purchase of the prestigious Air India building at Mumbai's Nariman Point, news agency PTI reported.
The state government has asked the airline company to submit a valuation report for the building for the purpose of the deal.
The government-owned airline company had floated a tender for the sale of the tower in December 2018, inviting bids from government entities.
The Air India Building
If walls could talk, the Air India building would have some interesting stories to tell.
Located in the upscale neighbourhood of Nariman Point in downtown Mumbai, the Air India building is a 23-storeyed commercial tower overlooking the Arabia Sea.
The skyscraper, surrounded by other ritzy high-rises, such as the Trident Hotel and Express towers, had housed the offices of the eponymous airline until 2013.
Adorned with an iconic centaur emblem on the top, the Marine Drive building is a celebrated gem of Mumbai's skyline.
Here's some historical trivia about the building:
The Air India building, completed in 1974, has been designed by prominent New York-based architect John Burgee. Philanthropist JRD Tata had served as the chairman of Air India at the time.
Like all other high-rises at Nariman Point, the landmark structure was constructed on land reclaimed from the sea.
It was the first building in India to boast of an escalator.
The building had been one of the targets of the 1993 Bombay blasts. A car bomb had exploded on 12 June 1993 in the basement parking lot of the building.
“This building is not just a concrete structure, but an identity for Air India. It was the culmination of JRD Tata's dreams,” Nitin Mhatre, a patron of Air India, told The Week on the building's 50th anniversary last year.
Why Did Air India Vacate the Building?
The Air India, in 2013, shifted all its corporate offices to New Delhi, its new headquarters, leaving the Nariman Point tower, as part of an asset-monetisation strategy to to battle financial troubles.
While the company retained the top three storeys of the building, the other floors were rented out to government entities.
The building was generating a rental income of Rs 100 crore per year in 2016, PTI had reported.
The Sale of the Building
After its request for a Rs 30,000-crore bailout from the Finance Ministry was rejected, a cash-strapped Air India had floated a tender inviting bids for the Nariman Point building in December 2018.
The Devendra Fadnavis-led Maharashtra government in 2019 had made an offer of Rs 1,400 crore for the tower, Rs 200 crore less than the reserve price Air India had set, The Indian Express had reported.
Government-run Jawaharlal Nehru Port Trust (JNPT), Life Insurance Company (LIC), and Reserve Bank of India (RBI) had also joined the fray, with the former two institutions bidding Rs 1,300 crore and Rs 1,200 crore respectively, IANS had reported.
Air India, at the time, had exhibited an interest in selling to the Maharashtra government. However, the process had been stalled after the change in administration, with the Maha Vikas Aghadi government (MVA) coming to power.
The Maharashtra government has now reinitiated the talks over the deal.
What Happened in the Latest Meeting?
In the meeting on Tuesday, 10 August, Air India told the state government that the valuation of the landmark structure stood at Rs 2,000 crore, PTI reported. The Maharashtra chief secretary asked the airline company to submit a valuation report of the building in order for the sale negotiation.
An official, who attended the meeting, told PTI that the Air India building had become old and would have to be demolished in 8-10 years.
"The building cost cannot be over Rs 2,000 crore. Its actual price would be only on the strategic location and the land cost," he said.
(With inputs from The Indian Express, The Week, and PTI)
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