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July 3, 2020

Roosevelt Hotel not to be sold

Top Story

July 3, 2020

ISLAMABAD: Rejecting the sale of the PIA-owned Roosevelt Hotel in New York or making renovations with multimillion-dollar investment, the Cabinet Committee on Privatization (CCOP) has decided to hire a financial adviser to move ahead with a joint venture.

The Committee directed that a financial adviser be hired to explore all possibilities for joint ventures to develop the hotel as recommended by M/S Deloitte in July last year.

An official announcement of the finance ministry issued after the meeting said, “The CCoP also directed the PC (Privatization Commission) to hire FA Adviser to start the process for transaction in the light of the report of Ms 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 (through Joint Venture) of primarily office tower over retail and condominium”.

A top official said there were conservative estimates that at least $1 billion investment was required to convert the hotel into a state of the art multi-purpose modern building.

In case of developing the site on modern lines, the investment might escalate beyond $1 billion. Keeping in view the lowest business environment where hotel industry faced a major blow in post-COVID-19 scenario, the CCOP decided to kick-start the process for moving ahead with a joint venture because it will take one and a half year to accomplish the transaction if complied with all envisaged deadlines.

“After getting the minutes of the CCOP’s meeting, the summary will be moved to the federal cabinet next week for approval. Then the Privatization Commission will advertise seeking applications for hiring the financial advisor. The Privatization Commission will also look into all legal aspects before moving ahead,” top official sources confirmed to The News on Thursday.

The official sources said the government had abandoned the Task Force established by the Aviation Division, as it had created more confusion because its name should have been Transaction Committee instead of Task Force so it was a step in the right direction.

Official sources said Roosevelt Hotel was not being sold out to anyone so this impression should be dispelled forthwith. There were three possibilities: first, to sell out the hotel; second, to make own investment; third to find out a suitable partner and strike such a deal aimed at achieving a win-win for both the Government of Pakistan and the potential investor.

“We will have to reply to different institutions so all the required process will be followed in the Roosevelt Hotel case in accordance with the privatization law and prescribed rules and regulations,” said the official.

The official announcement said Adviser to the Prime Minister on Finance and Revenue Dr Hafeez Shaikh chaired the meeting of the Cabinet Committee on Privatization at the Cabinet Division. The CCoP reviewed the one-point agenda of Privatization of Roosevelt Hotel (Manhattan, New York) asset owned by the PIA-Investment Limited.

As requested by the Aviation Division, the CCoP decided to de-notify the Roosevelt Task Force formed earlier under the chairmanship of Minister for Privatization for framing Terms of Reference for leasing the Roosevelt’s site for setting up a joint venture project. It was also directed that Ms Deloitte would update its study on the Hotel transaction in the next 4 weeks and the same shall be shared with the CCoP.