The much-delayed maintenance, repair and overhaul facility jointly established by Air India and Boeing in India will be operational by mid-2014, the U.S. aircraft maker says.

“The handover of the facility will be done by the end of this quarter or the next,” says Dinesh Keskar, senior vice president-sales, Asia Pacific and India, Boeing Commercial Aircraft.

The $100 million MRO project in Nagpur in western state of Maharashtra is part of an agreement between the national carrier and Boeing following an order for 737s and 787s, which was placed by Air India in January 2006.

The facility will be handed over by Indian conglomerate Larsen and Toubro (L&T), which was contracted to build the shop, after the commissioning of essential utilities and equipment like water, electricity and pressurized systems.

Promoted as one of the most modern MRO facilities in the sub-continent, the facility will cater to the national carrier’s aircraft as well as other airlines operating Boeing equipment. It would offer maintenance and overhaul services to 300 aircraft a year.

“The facility, spread over 50 acres next to the Nagpur airport, will be able to handle the 737s, 787s and 777s, and the extra capacity can be then used to service other airlines’ aircraft,” Keskar says.

Air India, however, will be able to use the facility free of charge as part of Boeing’s offset obligation. Also, the facility will have two widebody hangars and an engine overhaul shop for General Electric GE90 and GEnx powerplants. Each hangars has the capacity to house three 737 aircraft or one 777 or 747.

Earlier this year, Air India spun off its MRO unit into a separate business entity—Air India Engineering Services—placing around 7,400 of its workforce in that unit.

Air India plans to use the MRO facility as part of a separate subsidiary of Air India Engineering Services.

The Indian MRO industry is expected to triple in size between 2010 and 2020, from 22.5 billion rupees ($440 million) to 70 billion rupees.