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October 21, 2020

PIA chief says no plans of selling Roosevelt Hotel

Business

October 21, 2020

ISLAMABAD: Air Marshal Arshad Malik, CEO Pakistan International Airlines (PIA), on Tuesday said the government was not selling Roosevelt Hotel in New York; however, it would be shut down by December 31 for renovation and deliberations on its future.

“The PIA has approached the privatisation commission through the federal government, which will hire a financial consultant via an international tendering process to devise the future course of action, considering all the available options,” Malik said while briefing Senate Standing Committee on Aviation that met under the chair of Senator Mushahidullah Khan.

“It will be decided later whether necessary renovation or repair work be carried out or the existing building be demolished for reconstruction and raising a 100-storey hotel for which local bylaws are conducive.”

The committee also sought a detailed briefing from the Pakistan International Airlines Company Limited (PIACL)’s Board of Director (BoD) on financial stability plan and future vision to transform the national flag-carrier into a profit-earning entity.

The PIA chief said the declining business of the hotel was further aggravated due to the coronavirus pandemic, and could increase the company’s losses to $6 million/year. Senator Mushahidullah Khan, chairman of the committee said, the PIA should consider reopening of the routes where the COVID-19 issues had been addressed especially Japan and China.

Khan said his committee would support the positive development and initiatives of the PIA administration for the betterment of its services as the airliner was passing through a tough time.

It was further apprised that PIA’s Roosevelt Hotel, a 19-storey building located at a prime location, was acquired in 1978 on partnership, from its own profits and as a part of PIA diversification strategy.

In 1999, Senator Khan said, it acquired 100 percent shareholding at $36.5 million from its own resources and without any aid from the government.

The property had more than a thousand rooms, having an area of 43,313 square feet, and it was run by the world’s premier Hotel Management Company ‘Interstate Hotel and Resorts’ USA.

The committee was told that current market value of the hotel, assessed by M/s Deloitte, was $662 million based on the highest and the best use.

The financial position of the hotel had been in the ‘Red’, mainly due to debt servicing, unionisation, dilapidated building, infrastructure, rooms and public area conditions, which needed immediate upgrade and major repairs in life of severe weather conditions.