Govt may sell iconic Air India building in Mumbai to state-owned Jawaharlal Nehru Port Trust

Apart from weighing options to dilute terms and conditions for Air India's sale, the government is also focusing on asset monetisation of the cash-strapped airline. In a first major sign of its revival, the government has initiated a process for the sale of Air India's iconic building -- known as Air India Building -- in Mumbai to state-owned Jawaharlal Nehru Port Trust, India's biggest container port.

PTI quoted a source claiming the proposal has got in-principle approval from Prime Minister Narendra Modi and that an inter-ministerial committee has been asked to work out modalities. "A committee comprising Secretaries from the Civil Aviation and Shipping ministries has been set up to decide on the valuation of the building," reported the news agency.

The latest development is significant as asset monetisation is one of the ways the government plans to boost up the beleaguered airline. In Mumbai and Chennai alone, the government has earned over Rs 543.03 crore through the sale of its assets.

The 23-storeyed Air India Building, located at the prime location of Nariman Point in Mumbai, was once the airline's headquarters. The Civil Aviation Ministry informed the Lok Sabha in March that the centre earned Rs 291 crore as lease rental from the building in the past six years. Analysts suggest the building could attract a high price considering its location. The proposal, however, might face some hurdle. Not all top-level officials are in favour as the building provides huge revenue through rentals.

The Jawaharlal Nehru Port Trust at Navi Mumbai (formerly known as the Nhava Sheva Port) is India's largest container port, which handles around 55 per cent of the container cargo across all major ports in India. The port was commissioned in May 1989. It handled 4.83 million TEUs (Twenty Foot Equivalent Unit) in the financial year 2017-18 as compared to 4.50 million TEUs in the previous year.

As part of the revival plan, the government has also decided to revamp the airline's business and first-class cabins on international flights to boost revenues by wooing more high-paying passengers, the airline said on June 22. The government is committed to supporting the airline and to making it competitive, junior Civil Aviation Minister Jayant Sinha said.

Air India's debt burden is estimated to be more than Rs 50,000 crore. Experts suggest that no one except a new owner with complete control over management can turn around Air India. Earlier, Mahindra and Mahindra Chairman Anand Mahindra had said that the airline can be revived if the government provides full autonomy to the chairman and CEO keeping in mind the turnaround target.