In a move to pare its debt, Air India has asked the National Building Construction Company (NBCC) to prepare a detailed project report (DPRs) on monetisation of its prime properties located at Baba Khadak Singh Marg in Connaught Place and Vasant Vihar in the national Capital.

The property at Vasant Vihar is spread on 30 acres and it houses Air India’s staff colony. The property at Baba Khadak Singh Marg is spread across 16,000 square metres. Air India is expected to raise Rs 3,000-4,000 crores through this monetisation process.

These two properties were surrendered by Air India to the Ministry of Housing and Urban Affairs last year.

The Government wants to expedite monetisation of Air India’s immovable assets to reduce its debt burden in a bid to make the airline attractive for privatisation.

Top sources said Air India has come up with a fresh roadmap on asset monetisation to tackle its fiscal woes. “At a high-level meeting held last week, Air India asked the NBCC to make separate roadmap for each properties,” sources added. As per the plan, the NBCC will make residential projects in the Vasant Vihar property, while it will raise commercial projects on the Baba Khadak Singh Marg property.

“These properties were on perpetual lease of 99 years and can’t be monetised directly by Air India due to land title issues. The Government will monetise the properties and the proceeds will be transferred to the Consolidated Fund of India. From there, the Government will transfer the money to the airline for reducing debt,” said officials of the Ministry of Civil Aviation. The Cabinet Committee on Economic Affairs had given in-principle approval for disinvestment of the Government’s stake in Air India and five of its subsidiaries, based on the recommendations of the NITI Aayog.

Air India has a total debt of around Rs 52,000 crore which comprises Rs 22,000 crore as aircraft loan and the rest as working capital loan and other liabilities. The property at Baba Khadak Singh Marg is just a plot with no construction. It was meant to house the national carrier’s city terminal office. Both these properties were allotted to Indian Airlines Ltd, which was merged with Air India.

Both the NBCC and Air India have agreed on some common terms regarding asset monetisation over the national carrier’s properties in Vasant Vihar and at Baba Khadak Singh Marg. Sources added the NBCC has already started planning for these projects. In the second phase, Air India will reportedly monetise three other assets.

Earlier, in a reply to Parliament, the Ministry of Civil Aviation had stated that Air India has mopped up Rs 543.03 crore so far from monetisation of its assets in prime locations such as Mumbai and Chennai. The monetisation included the sale of six flats at Sterling apartment, Mumbai to the State Bank of India with each of these flats fetching Rs 22 crore. The national carrier also collected Rs 291 crore as lease rental from its prized Air India building at Nariman Point, Mumbai between 2012-13 and January 2018.a