MUMBAI, June 3 -- Nearly two years after the centre gave the green light, the Maharashtra government officially signed a Rs.1,601 crore deal to acquire the iconic Air India building. The agreement was signed on Tuesday between the Mumbai Collectorate and Air India Assets Holding Limited (AIAHL) in the presence of chief minister Devendra Fadnavis, at Mantralaya. The main objective of the acquisition was to consolidate various state government offices, which are currently operating from rented premises across Mumbai, into the 23-storeyed building. It will help the government reduce its annual expenditure of around Rs.200 crore on rented office spaces. Multiple state departments currently function out of rented premises in Mumbai and Navi Mumbai, such as rural development, public health and medical education. Others such as the transport commissionerate, Maharashtra Administrative Tribunal, fisheries commissionerate and advisory bodies, operate from similarly rented premises. The Maharashtra cabinet had approved the proposal to purchase the Air India building after a meeting on November 8, 2023. Subsequently, the state government waived unearned income dues and penalties amounting to Rs.298 crore payable by Air India, facilitating the transfer process. Administrative approval for the Rs.1,601-crore expenditure was granted on June 27, 2024; and the state government transferred the payment to AIAHL on May 31, 2026. Before proceeding with the purchase, the government commissioned a structural audit of the building through Mumbai-based engineering institution VJTI. The audit reportedly concluded that the structure would remain functional after the recommended repairs were made. Milind Mhaiskar, additional chief secretary, public works department (PWD) said, "The iconic Air India building's refurbishment will be undertaken immediately and completed in six months so that our offices located elsewhere can be relocated here." After shifting its headquarters to New Delhi in 2013, Air India decided to sell the building as part of its asset monetisation programme. The property was not included in Air India's privatisation and transfer to the Tata Group. Before the airline's sale, the building and several other assets and subsidiaries were transferred to AIAHL, a special-purpose vehicle of the Union government. In 2019, three entities-the Maharashtra government, the Jawaharlal Nehru Port Trust and the Life Insurance Corporation of India-expressed interest in acquiring the property, submitting bids of Rs.1,375 crore, Rs.1,200 crore and Rs.1,400 crore, respectively. After the Eknath Shinde-led government assumed office in 2022, it revised the bid to Rs.1,601 crore against Air India's reserve price of Rs.2,000 crore....