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July 5, 2020

PC to appoint adviser for Roosevelt Hotel transaction

National

July 5, 2020

ISLAMABAD: Though the Cabinet Committee on Privatization (CCoP) Thursday decided to appoint a financial adviser for leasing out the site of Roosevelt Hotel, New York for a joint venture, the chair remained clueless on how to respond when one of the participants raised some very pertinent questions.

The committee met here with Adviser to the PM on Finance and Revenue Dr Hafeez Shaikh in the chair.

The adviser was asked if the Privatization Commission could take any decision about the assets owned by PIA-IL (PIA Investment Limited), which is a subsidiary of PIACL (Pakistan International Airlines Company Limited) arguing it should be a prerogative of the Board of Directors of PIA-IL to decide on how to advance and run its assets commercially.

According to the official sources, Asad Umar looked at the official with appreciation saying that he (minister) also agreed with his viewpoint. The PIA-IL owns Roosevelt hotel in New York and Hotel Scribe in Paris and it has a BoD, which can decide on how to deal with its assets and run them.

However, that particular official also said in case the memorandum of understanding of the company (PIA-IL) allows the federal government (Privatization Commission) to liquidate its assets then it was ok, otherwise the PC cannot do anything.

The official said the Privatization Commission could decide to go for restructuring or privatization of PIACL as a whole entity, but it could not pick up any asset of the subsidiary of PIACL and take decision on it and that too in the presence of Board Directors of PIA-IL. That official also questioned, the sources disclosed, saying as to whether PIA-IL, which was made in 1977, had been asked what it had done in the 43 years time.

The official also said Roosevelt Hotel was a listed building with the city government of New York and put another question if the Government of Pakistan could redevelop the site of the hotel without permission of the NY city government or not but the meeting participants, including the chair remained silent, and did not come up with any answer.

However, the CCoP asked Privatization Commission to appoint a financial adviser to start the process for the 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”.

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.

Sources said the CCoP decided to de-notify the Task Force on Roosevelt Hotel transaction Zulfi Bokhari, Special Assistant to PM on Overseas, who was a member of task force remained silent in the meeting.

The CCoP de-notified the Task Force pleading that the provision for constitution of Task Force is not provided in Privatization Commission Ordinance 2000 and such constitution may lead to legal implications in future.