The Maharaja’s abode is now in Maharashtra’s hands

The Maharashtra government on Tuesday formally acquired the iconic Air India building at Nariman Point in south Mumbai from Air India Assets Holding Limited for ₹1,601 crore. The move aims to ease the long-standing shortage of office space near Mantralaya.

The transfer agreement between AIAHL and the state Public Works Department was completed in the presence of Chief Minister Devendra Fadnavis in the Cabinet Hall at Mantralaya after a cabinet meeting, according to an official release.

The state plans to shift several of its departments to the building, many of which currently operate from rented premises across Mumbai. With the acquisition, the government will get around 46,470 square metres of office space close to the state secretariat. This is expected to reduce rental expenditure, bring departments closer to Mantralaya, and improve administrative coordination. The PWD plans to carry out internal renovation and make the building ready for use within a year.

MUST READ | Domestic airfare to rise further amidst Air India, IndiGo capacity cut

Mantralaya and its annexe have faced a shortage of office space for several years. The problem worsened after a major fire at the complex in 2012 forced several departments to move out. Since then, many government offices have operated from different locations across Mumbai, some far from the secretariat.

The Air India building, a 23-storey sea-facing commercial tower built in 1974 on state government-owned reclaimed land, has long been one of Mumbai's landmarks and was popular in its early years for experiences such as riding its lifts.

Air India decided to sell the building in 2018 as part of an asset monetisation plan after shifting its headquarters to New Delhi. Following the airline's privatisation and acquisition by the Tata Group, its non-core assets, including the Nariman Point building, were vested with AIAHL. The Maharashtra government, which had been in talks for the property since at least 2021, was among the bidders when Air India sought ₹2,000 crore for the building.

DON'T MISS | Air India, IndiGo to cut domestic flights from June 1: Report

The state had initially offered ₹1,400 crore, while the Jawaharlal Nehru Port Authority offered Rs 1,375 crore and the Life Insurance Corporation of India offered ₹1,200 crore.

After the Eknath Shinde-led government came to power in Maharashtra, the state increased its offer to ₹1,601 crore and agreed to waive around ₹298 crore in unrealised income and interest dues linked to the leased land.

In 2022, then Deputy Chief Minister Devendra Fadnavis met Union Civil Aviation Minister Jyotiraditya Scindia and sought preference for the Maharashtra government in the sale. The state cabinet approved the purchase in November 2023, and the Centre granted final approval for the transfer in March 2024. The deal moved closer to completion in April this year when the Finance Department transferred ₹1,600 crore to the PWD for finalising the agreements.

MUST READ | Why officials may release only an interim report a year after the deadly Air India crash

The handover event was attended by Deputy Chief Minister Sunetra Pawar, Tourism Minister Shambhuraj Desai, Public Works Minister Shivendrasinhraje Bhosale, Chief Secretary Rajesh Agrawal, Additional Chief Secretary Milind Mhaiskar, Mumbai City Collector Anchal Goyal and Air India officials, including its commercial officer.