Maharashtra inches closer to Air India building as Rs 1,600 cr released to finalise agreement | Mumbai News
3 min readApr 28, 2026 10:35 PM IST
With transfer of funds worth Rs 1600 crore to Maharashtra’s Public Works Department from the State Finance department last week, the process of signing an agreement between the state government and Air India Assets Holding Limited (AIAHL) for the transfer of the iconic Air India building, located near the Mantralaya at Nariman Point, is set in motion.
In March 2024, the Centre had approved the sale of the iconic Air India building in Mumbai to the Maharashtra government for Rs 1,601 crore, following which the state Cabinet had approved the acquisition in November 2025.
According to a senior official from the PWD, the agreement will be sent to the authorities to avoid any lacunae and is likely to be signed within next two weeks.
Once the agreement is signed and the building is transferred, the state government plans to complete internal renovations, making it ready for use within a year. Subsequently, several government offices—many of which currently operate out of rented premises—will be relocated here.
Following a major fire at the Maharashtra Mantralaya complex in 2012, a number of state government offices and departments were scattered across different areas of the city, some of which are far from the state secretariat and the state government has been paying hefty rent for these offices.
With the acquisition of the Air India building, around 46,470 square metres of space will be available to the state government in close proximity to the Mantralaya.
The building, a well-known landmark in the high-profile Nariman Point area of India’s financial capital, was not part of Air India’s privatisation plan.
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The state government, facing a space crunch at the Mantralaya and its annexe, plans to move some of its offices to the 23-storey sea-facing building.
The Air India building, designed by the renowned architect John Burgee, was constructed in 1974 on reclaimed land that the state government had leased to Air India.
In 2018, a few years after shifting its headquarters to New Delhi, Air India decided to dispose of the building as part of its asset monetisation plan. While Air India’s asking price at the time was Rs 2,000 crore, the Maharashtra government had offered Rs 1,400 crore. Other bidders included the Jawaharlal Nehru Port Authority and the Life Insurance Corporation of India, which offered Rs 1,375 crore and Rs 1,200 crore, respectively. The asset monetisation process, however, got stalled.
After the Eknath Shinde government took charge in Maharashtra, discussions to acquire the building restarted, with the state government finally decided to raise its offer to Rs 1,601 crore, and waive nearly Rs 300 crore of dues—mainly unrealised income and interest for the leased land.
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In 2022, then deputy chief minister Devendra Fadnavis had met then Union Civil Aviation Minister Jyotiraditya Scindia, seeking preference for the state government in the sale of the Air India building.
