The Cabinet Committee on Privatisation Thursday decided not to sell the Pakistan International Airlines-owned Roosevelt Hotel in New York.
Instead, the committee has decided to run the hotel under a public-private joint venture with a third party.
The cabinet committee met under the chairmanship of Adviser to the Prime Minister on Finance Abdul Hafeez Shaikh and it also denotified the task force formed for the sale of the hotel.
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.
It was also agreed that the hotel would be started from scratch with a private entity. The committee also agreed to appoint a financial adviser to help the government move towards initiating the joint venture.
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.
The meeting was attended by ministers for communication, 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 and the State Bank of Pakistan governor, among others.
The summary for the privatisation of the Roosevelt Hotel was prepared by the Aviation Division.
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.