Life Insurance Corporation (LIC) of India has come to the aid of the national carrier Air India (AI), which is struggling to survive, by bidding for its iconic Nariman Point headquarters in Mumbai. The Maharashtra state government is the other bidder for this high-rise. Incidentally, both these entities already have their landmark offices — LIC Yogakshma, and Mantralaya, respectively — near the 23-storey AI building.
Chief minister Devendra Fadnavis confirmed that the Maharashtra government had put in a bid for acquiring the Air India building. The Jawaharlal Nehru Port Trust (JNPT), which had earlier this year shown interest in acquiring the Maharaja’s crown jewel property, did not bid for it.
The debt-laden carrier had on December 10 issued a tender inviting bids from “government entities only for sale of lease hold rights of the land and its iconic AI building at Nariman Point, Mumbai, on as is, where is basis”. The deadline for submitting the sealed bids was 2.30pm on December 31.
“So far, only LIC and the state government of Maharashtra (have submitted their bids),” aviation secretary R N Choubey told TOI on Monday evening after the deadline lapsed. The response to the AI building is better than the failed bid to divest in the airline itself, which did not receive even a single bid earlier this year.
It is not yet clear whether the government will go ahead with the LIC and Maharashtra government bids, or extend the deadline to allow more bids. Earlier this year, JNPT had shown interest in the high-rise. But the process could not go forward as a single party meant no bidding. The airline expects to raise about Rs 1,500 crore by selling the building. “The character of this iconic structure will be maintained, irrespective of ownership,” Choubey had recently told TOI.
Sources say, given the tight market conditions, several government agencies have had to relax bidding norms for prime properties. A case in point is the Taj Mansingh Hotel in Delhi where civic agency NDMC had to eventually relax bidding norms by allowing two bidders to go ahead with the process of leasing it out for 33 years more this summer after several failed auctions. The AI building has also got two interested parties — that could enable a bidding, if the government so decides.
AI currently retains five floors in this Queen’s Necklace marvel and gets about Rs 107 crore as annual rental from the rest. When the JNPT deal did not materialise, the airline planned to vacate some more floors and increase its annual rental to Rs 120-125 crore.
