Govt irked over lack of Aviation Division’s involvement in Roosevelt Hotel matters

ISLAMABAD: Federal Cabinet has expressed displeasure over a proposal to shut down operations of the Hotel Roosevelt permanently without consulting the aviation division.

A source told Pakistan Today that the cabinet in its meeting held on Tuesday came down hard over the top decision-makers for ignoring the aviation division in deciding the fate of Hotel Roosevelt and directed all the stakeholders that the aviation division be made a part of the decision-making process.    

The federal cabinets has directed the stakeholders that aviation division be taken onboard in the decisionmaking and has asked them to submit a formal summary on the recommendations of the Committee for consideration of the Economic Coordination Committee (ECC).  

The Cabinet also considered the proposals tabled by a committee headed by Deputy Chairman, Planning Commission and including Secretary, Finance Division, Secretary, Aviation Division and Secretary, Law & Justice Division to deliberate on the financial and legal implications of the issue in a holistic manner.

The committee proposed that the Roosevelt’s operations be shut down permanently, and negotiations with union be commenced and a sum of US$5million be approved to cater for expenses at Roosevelt till year-end and disbursed by end of September 2020.

The proposal said that the current cash balance of Pakistan International Airlines Investments Limited (PIAIL) is only US$3 million. The Committee directed the PIAIL to give notice prior to September 9, 2020 payment date to lender for prepayment of US$105 million on October 9, 2020, with exit fee of US$525000 as per legal opinion. Cash funds will be made available at least five working days prior to October 9, 2020.

The committee also proposed a sum of US$13.7 million for settlement of severance of union and employees, US$18 million for pension fund, US$3.4 million for creditors, and US$ 2.00 million for closing cost – total amounting to US$ 142.00 million.

The committee also proposed carrying costs of approximately US$ \13.00 million to be funded until such time GOP finalizes lease/JV of Roosevelt’s site. 

During the ensuing discussion, the additional secretary of the cabinet division pointed out that the above case should be submitted by the aviation division being the administrative division of PIAIL, in the form of a summary in light of rule 18(1) read with rule 23(4) of the Rules of Business, 1973.

The ECC deliberated on the recommendations of the committee and observed that the aviation division was not consulted in the matter. The ECC directed that all stakeholders including aviation division should be in involved in every discussion and negotiation related to Roosevelt Hotel, New York.

The forum further directed that issue should be handled in a fair and transparent manner and the best national interest.


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Mian Abrar
Mian Abrar
The writer heads Pakistan Today's Islamabad Bureau. He has a special focus on counter-terrorism and inter-state relations in Asia, Asia Pacific and South East Asia regions. He can be reached at [email protected]
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