The Maharashtra government has moved closer to acquiring the iconic Air India building in south Mumbai after the Finance Department transferred Rs 1,600 crore to the Public Works Department, setting in motion the process to finalise the agreement with Air India Assets Holding Limited.
Agreement Process Underway
A senior Public Works Department (PWD) official stated that the draft agreement would be sent for legal vetting to ensure no lacunae remain, and it is expected to be signed within the next two weeks. The Centre had approved the sale of the building to the Maharashtra government for Rs 1,601 crore in March 2024, and the state cabinet cleared the acquisition in November 2025.
Renovation and Operational Plans
Once the agreement is signed and the property is transferred, the state government will undertake internal renovations to make the 23-storey, sea-facing structure operational within a year. Several offices currently functioning from rented premises will be shifted to the building, located near the Mantralaya at Nariman Point.
The move addresses a severe space crunch at the Mantralaya and its annexe. After a major fire at the secretariat complex in 2012, numerous departments relocated to different parts of the city, incurring ongoing rental expenditures. The acquisition will provide approximately 46,470 square metres of office space in close proximity to the state secretariat, thereby streamlining administrative functioning.
Historical and Architectural Significance
The building, constructed in 1974 on reclaimed land leased by the state government to Air India, was designed by architect John Burgee. It remains a prominent landmark in Mumbai's financial district. Air India had decided to monetise the asset in 2018 after shifting its headquarters to New Delhi.
Negotiation History
While the airline initially sought around Rs 2,000 crore, the Maharashtra government offered Rs 1,400 crore. Other bidders, including the Jawaharlal Nehru Port Authority (JNPA) and the Life Insurance Corporation of India (LIC), quoted lower amounts, but the process stalled. Discussions resumed after the Eknath Shinde-led government assumed office, with the state eventually raising its offer to Rs 1,601 crore and waiving nearly Rs 300 crore in dues related to unrealised income and interest on the leased land.
In 2022, then deputy chief minister Devendra Fadnavis met then Union civil aviation minister Jyotiraditya Scindia to seek preference for the state government in the sale process.
