ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) on Thursday decided that Roosevelt Hotel in New York, a property of Pakistan International Airlines (PIA), will not be privatised, rather it would be run under a joint venture with private sector.
The decision was taken by the cabinet committee, which met on Thursday under the chairmanship of Adviser to Prime Minister on Finance Abdul Hafeez Shaikh.
According to a Finance Division statement, the CCoP directed the Privatisation Commission to hire the services of a financial adviser to start the process for the transaction in light of a report by accounting firm Deloitte from July 2019 which recommended that “the highest and best use of the Roosevelt Hotel property is to redevelop the site into a mixed-use [property] (through joint venture) of primarily an office tower over retail and condominium.”
The meeting was informed that Deloitte would update its study on the hotel transaction in the next four weeks and the same will be shared with the CCoP.
Additionally, “as requested by the Aviation Division”, the CCoP also decided to de-notify a task force formed last year to develop a business plan and for framing the terms of reference for leasing the Roosevelt’s site and setting up a joint venture project, the press release added.
The task force, whose formulation was approved by the CCoP in its meeting in November last year, was chaired by Minister for Privatisation Muhammad Mian Soomro and included Special Assistant to the Prime Minister on Overseas Pakistanis Zulfi Bukhari and other officials as members.
The meeting was attended by representatives of ministers for communications, law and justice, privatisation and power and advisers on commerce and investment and institutional reforms and austerity.
A special invitation was also given to the Minister for Industries and Production Hammad Azhar and Governor State Bank of Pakistan Reza Baqir, among others.
Meanwhile, SAPM Bukhari said that the government is restructuring the Civil Aviation Authority (CAA) and Pakistan International Airlines (PIA) to improve their performance.
He said that the government is taking action against the pilots holding bogus degrees or licenses. He said that Prime Minister Imran Khan has directed for scrutiny and forensic report of 262 pilots which would be made public. Bukhari said that fake degree holders would be terminated from service to avoid untoward incidents like Karachi plane crash.
On Wednesday, amid reports that the government was holding the CCoP meeting to discuss the plan to sell the Roosevelt Hotel, the PPP had opposed the move, terming it ill-timed.
“Is this the time to sell Roosevelt Hotel, when due to the pandemic property prices have come down significantly and it will result in a loss to Pakistan as we will not get the right price?” PPP’s parliamentary leader in the Senate Sherry Rehman had questioned in a statement.
“The property is worth billions and it was making a profit when I was serving as ambassador to the US,” she added.
The PIA-owned 19-storey hotel with 1,025 rooms plus allied facilities in New York is considered a valuable property that also carries cultural significance for Pakistan. It has remained in the news for the last several years over its proposed auction. However, the management of PIA in the past had always rejected the claims of auction, etc.
The hotel was acquired by PIA Investment Limited on lease during the year 1979 with an option to purchase the property. The airline had purchased the hotel for $36.5 million against a demand of $59.5m by contesting a lawsuit against the owner in 1999. The Roosevelt has been managed by Interstate Hotels & Resorts since 1997.