Air India to sell off this Mumbai icon? Maharaja will no longer be same

The government is planning to sell the iconic building of Air India at Mumbai. The building is to be sold to the country’s biggest container port – the Jawaharlal Nehru Port Trust.  The state-owned JNPT will acquire the building from the beleaguered, cash-strapped airline under guidance from the Ministry of Shipping, sources told PTI. Prime Minister Narendra Modi has reportedly given his in-principle approval to sell Air India’s iconic building to JNPT.

“The proposal has received in-principle approval from Prime Minister Narendra Modi, following which an inter-ministerial panel has been constituted to work out the modalities,” sources revealed.

Air India’s 23 storey building is located at at Mumbai's most coveted real estate area in Nariman Point and is spread over an area of 10,000 square feet. The lease rate is Rs 350 per sq. ft, if we calculate accordingly a single floor will cost Rs 35 lakh per month. It was once the airline’s headquarters and is likely to fetch high valuation.

When government’s efforts of Air India’s strategic disinvestment failed to take off, then came the proposal to sell the building to state-owned JNPT.

One of the sources said that a committee comprising secretaries from the Civil Aviation and Shipping ministries has been set up to decide on the valuation of the building.

JNPT comes under the Shipping ministries while Air India comes under the Civil Aviation.

“At present, the thinking is that name of the building would not be changed after sale to JNPT. It is commonly known as ‘Air India building’,” sources told PTI.

A section within the airline is strongly opposing the proposal and also said that the building is a “cash cow” for the airliner, said some Air India officials.

JNPT is India’s biggest container port and it is also known as Nhava Sheva Port. 55% of the total container cargos are handled by JNPT and has annual profit worth Rs 1,300 crore.

“The government is giving a new thrust to strengthen Air India's management practices and operational efficiencies while the disinvestment plan would depend on various circumstances,” said Finance Minister Piyush Goyal on Monday.

In the next 18 months, you will see the visible change, he added.

Few properties of Air India has been sold so far by the government. The Civil Aviation Ministry this year in March informed Lok Sabha that from monetization of assets in locations like Mumbai and Chennai the airline has earned up to Rs 543.03 crore.

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“The monetization included the sale of six flats at Sterling apartment, Mumbai to the State Bank of India with each of these flats fetching Rs22 crore,” the ministry had said.

The carrier collected Rs 291 crore as lease rental from the Air India building at Nariman Point, Mumbai between 2012-13 and January 2018, added Ministry.

Air India’s debt burden was around Rs 50,000 crore at the end of March 2017.