MUMBAI: Three years after the cabinet approval, the iconic Air India building at Nariman Point was officially taken over by the Maharashtra government on Tuesday. Chief Minister Devendra Fadnavis presided over the registration of the agreement for the Air India building. "It will not only save rent but also bring offices together," CM Fadnavis told TOI. In 2023, the state cabinet had cleared the plan to purchase the Air India building in Nariman Point to expand Mantralaya and house state government offices there.
Details of the Acquisition
The cabinet had decided to waive all unearned income and other penalties from Air India, enabling the state government to take possession of the iconic building quickly. The state government has paid approximately Rs 1,601 crore for the building. With this acquisition, 46,470 square meters of space will be available for government offices in this 22-story building.
Financial Benefits
Officials stated that the state government will save around Rs 200 crore in annual rent if all offices currently housed in private buildings are relocated to the Air India building. However, it will take more than six months to make the building usable, as the lifts are not working and significant interior work is required. The central air conditioning system is also non-functional, as the building is over 50 years old.
Background of the Deal
In 2022, then Deputy Chief Minister Fadnavis met Union Civil Aviation Minister Jyotiraditya Scindia and urged him to give preference to the state for acquiring the building. Apart from the Maharashtra government, the Reserve Bank of India (RBI) was reportedly interested in buying the building. Fadnavis had highlighted the space crunch faced by government offices in Mantralaya and the annex building. "Met Union Minister Jyotiraditya Scindia in New Delhi and requested to give the Air India building in Mumbai to the state government. At present, even with the Mantralaya and an annex building, the space for government offices is insufficient, hence the demand for this building. We had given this proposal when I was Chief Minister. But in the meantime, that proposal was withdrawn. After that, we corresponded again. Currently, both the Reserve Bank and Maharashtra government have demanded this space," Fadnavis had said in a tweet.
Lease and Transfer Details
Officials noted that Maharashtra had leased the sea-facing property to Air India in 1970 for a 99-year tenure. As per land transfer rules, the state revenue department was entitled to recover a transfer fee (or unearned income) during the transfer of the lease, which would have amounted to approximately one-eighth of the market value. "Air India had then sought a waiver of this payment as a special case, which was approved," an official said.
