Air India invites bids for selling iconic Nariman Point building

DEBT-ridden Air India has called for bids to sell the iconic 23-storey -- Air India Building -- located at Nariman Point in Mumbai. According to a tender document on the airline's website dated December 7, bids have been invited by December 31, 2018 from state-run companies for the sale of the building and for the land on which it has been built on an "as is where is" basis. "Air India invites sealed bids from intending bidders for Sale of 'Leasehold Rights' of the land and Air India Building constructed thereon, at Nariman Point among Govt. entities only on as is where is basis," the tender document said.
"Air India has the 'Leasehold' rights on the land...
on which a very prominent and an iconic building, i.e. Air India Building at Nariman Point, Mumbai, has been constructed." The building is built on a plot measuring 7,512.60 sq.m leased from the Maharashtra state government for 99 years and has 23 floors besides two basements. "Total built up area is 4, 99,998.00 sq.ft including basements. Out of 23 floors of the building, 17 floors have been given on rent," the document said. According to the tender document, the company will retain "approximate 5.000 sq.ft" of carpet area on 22nd floor for its office use. "Air India retains 'Logo' on the top of the building and maintains the same. Name of the building to be maintained as 'Air India Building' by the buyer," the document added. Currently, the airline has leased 17 floors in the tower block and part of ground floor to various government offices like Bank of India, India Tourism, Income Tax, Service Tax and TCS.
In a related development, after failing to sell a stake in Air India, the government is now working on a four-pronged strategy, including a financial package and a brand-refreshing exercise, to revive the national carrier and make it globally competitive, aviation minister Jayant Sinha told a leading daily.
“What we are working on now is a robust revival plan for Air India that will position it well for being a strong competitor in the future,” Sinha said.
The plan has four elements — a financial package, a refresh strategy (Maharajah Direct), a series of organisational and governance reforms and a plan to strengthen the workforce and motivate them further, the minister said.
“This will enable Air India to become a globally competitive airline,” Sinha said. The decision to revive the national carrier was taken after the government’s failed attempt to divest a 76% stake in Air India in May.
Sinha said there were two likely reasons for the airline not getting bids – investors were waiting for favourable industry conditions and airlines wanting to become global longhaul carriers not deciding whether they should go ahead on their own or buy out Air India.
“In businesses, there is a decision to be made on make versus buy,” said Sinha.
As part of the revival strategy, the government has already announced that it will transfer loans of Rs 29,000 crore from Air India’s balance sheet to help reduce its interest burden by about Rs 2,700 crore from Rs 4,400 crore per annum. The financial package also has a fresh equity component, for which approval will be sought as part of a supplementary grant in the current session of Parliament.