A number of properties belonging to debt-ridden Air India will soon be developed by National Buildings Construction Corporation (NBCC) in a bid to help the airline monetise its surplus land assets. The properties include — a 3.54 acre land parcel at Baba Kharak Singh Marg in New Delhi, a 1.3 acre commercial plot in Anna Salai in Chennai and a 3 lakh sq ft office space in the Air India Building at Nariman Point in Mumbai.
The airline has been under financial stress for several years now and has been looking for options to reduce its debt. It’s outstanding debt and working capital loans stood at Rs 26,033 crore and over Rs 21,125 crore respectively as on December 31, 2013.
Within the Memorandum of Understanding signed with Air India in 2014, National Buildings Construction Corporation (NBCC), a state-owned real estate developer, will develop the properties owned by the carrier and will either share profits on the development or charge a fee for the same.
The first project that NBCC has decided to take up is the development of its commercial plot at Anna Salai, in Chennai. “We have started evaluation work on two projects — one in Delhi and one in Chennai. Before the end of this financial year, the foundation work should begin,” said Anoop Kumar Mittal, CMD, NBCC.
The decision to take up Chennai as the first project was taken up in a recently held meeting between the CMDs of NBCC and Air India.
“We are doing due diligence of the said land parcel by engaging property consultants of international repute and after doing valuation, feasibility and opportunities for land mix use, we will proceed further,” said Mittal.
Earlier, the Cabinet Committee on Economic Affairs (CCEA) while approving the financial restructuring plan & turnaround plan for Air India had envisaged the monetisation of the firm’s assets to the tune of Rs 5,000 crore over the next 10-year period along with the annual target of Rs 500 crore from financial year 2013.