Roosevelt Hotel given to NY local govt for 3 years for $220m: Saad

The aviation minister says hotel had been closed since Covid-19 period and $20m liabilities were pending

June 05, 2023
Aviation and Railways Minister Khawaja Saad Rafique talking to media persons in the divisional superintendent office at the city station in Karachi on June 23, 2022. — APP/File

LAHORE: Minister for Aviation and Railways Khawaja Saad Rafique said on Sunday that a contract had been signed with the New York City government to operate the renowned Roosevelt Hotel of the Pakistan International Airlines (PIA) situated in New York for three years. In a press conference held at the Allama Iqbal International Airport here, the minister said that a revenue of $220 million would come to the country as a result of the agreement. Giving details of the agreement, he said that 1,025 rooms of the hotel would be handed over to the New York City government for three years and the initial earnings from the hotel had started pouring in. Under the agreement, one year business was guaranteed. However, he hoped that the hotel business would continue for all three years. He said that there were several issues involved in the Roosevelt case, like the hotel was at risk of being declared a landmark after which the building could not be altered. However, now the danger had subsided for at least three years. The minister said that earlier the hotel had been closed since the Covid-19 period, and an amount of $25 million were being spent on the closed building and $20 million were pending as liability.


He said that 479 employees were working in the hotel, which was a big number, and it was difficult for the hotel to terminate them from jobs due to the US labour laws. However, now after the agreement, this number would be decreased to 77 at the end of the contract period. He thanked the New York City government for its cooperation. Regarding the outsourcing of airports in Pakistan, the minister said that three international airports, Lahore, Karachi and Islamabad, were being outsourced and made it clear that outsourcing did not mean privatisation. In a first, the Islamabad airport would be outsourced. He said that only operation of the airports would be outsourced and not the land or property. As a result of the arrangement, new contractors would develop, improve and operate the airports, and after completion of the agreement period, the contractors would hand over the airports to the government again.

He said the current administration had put it on the track and soon agreements would be signed with the best international airport operators. A credible company, International Finance Corporation (IFC) of the World Bank, had been given the task of outsourcing the airports as no Pakistani company had the experience in this regard. He said that several airports, including Madina Munawwarah, Istanbul, Dubai and others, were being operated through the model being introduced in Pakistan now. The minister said that the contracts would be given through open bidding and several international contractors were showing interest in this regard. He cleared that no employee would be expelled from service. Khawaja Saad said that the Civil Aviation Authority (CAA) was also launching high profile projects in which runways at the Quetta Airport would be reconstructed and upgraded. He said the Faisalabad runway was already under construction which would be operational soon and Lahore airport’s runways would also be upgraded. He said that upgrade work of the Karachi Airport was already undergoing while Gwadar International Airport was also under construction and would become operational soon. For the first time, Haj operation from the Quetta Airport was successfully in process and people of Balochistan were going for Haj through this airport. Two more airports, Sukkur and Dera Ismail Khan, would be converted into international airports to facilitate the citizens of the area.

Discussing the issue of a B777 of Pakistan International Airlines (PIA) stopped by the authorities at Kuala Lumpur, Malaysia, the minister said that the issue was resolved by the legal team of PIA in 72 hours and now the plane had reached Pakistan after carrying the passengers. Giving details, he said the airplane was a leased aircraft and the owner company unethically went to the Malaysian court on which the court seized the flight in an ex-party decision. PIA was not heard, adding that if the court had heard PIA, the incident would not have happened. He thanked the Malaysian ambassador in Pakistan for his cooperation. He said PIA was a complicated case, adding that several steps were needed to upgrade the department. Some improvements had been made in the flights like better food quality, seating and services, but it needed several other things.

He said that currently, PIA was transporting 65,000 Haj pilgrims in a big operation. He said that outsourcing was a solution to several problems of PIA, adding the airline could be made into two departments; PIA would bear the liabilities and the other would be operated according to international standards and models. No PIA employee would be sacked. To a question about the ban on PIA in several countries, he said the country had to bear the loss of Rs71 billion per annum due to a stupid statement of a former minister, who had some ego issues with the administration. He said the government was contacting the governments of other countries to resolve the issue. The British government had even agreed on restoration of the flights, but some legislation was needed in this regard, which would also be done soon.

He said the PTI considered itself a party of pious people and all others were thieves, and this narrative damaged PIA as the former minister wanted to say that the previous governments consisted of thieves and all employees recruited during those rules were also thieves and corrupt. He said the fake degree issue was presented in an exaggerated way. To a question, he said the world model had been changed and the world now thinks that doing business was not the job of governments; it was the job of businessmen, whereas the job of government was to regulate the system. He added that a country, which only focused on its regulations instead of doing business, progressed a lot.