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Saturday, May 18, 2024

Roosevelt Hotel sale: Pakistan assigns financial advisors

Financial advisors have been designated to assist in the privatisation programme of PIA-owned Roosevelt hotel.

Financial advisors have been designated for the Roosevelt Hotel sale and privatisation programme. A meeting was held to discuss the details of the process. The Managing Director of PIA Investments Limited, Najeeb Samie, who was attending the meeting, requested the chairman of the standing committee to make the event in-camera.

He added that a financial adviser is in the process of being appointed and terms of reference (TORs) are being drawn up in consultation with PIA and the Aviation Division for setting up a joint venture project for prospective mixed-use development. As per rules, the proposed transaction structure will be presented before the PC Board and the Cabinet Committee on Privatisation (CCoP) for recommendations and for approval and ratification by the federal cabinet.

Donald Trump may have been interested in Roosevelt Hotel Sale 

The National Assembly Standing Committee on Privatization had sought detail briefing from the government on the privatization of Roosevelt Hotel (Manhattan, New York).  Meanwhile, the committee also discussed the performance of the PIA in its meeting to be held on July 15 in parliament house.

Read more: PIA banned in USA as well

A senior Pakistan International Airlines (PIA) official on Wednesday informed the National Assembly Standing Committee on Privatisation that US President Donald Trump has shown interest in buying the Roosevelt hotel, located in New York’s Manhattan borough.

At a previous meeting, Pakistan Muslim League-Nawaz (PML-N) leader Khawaja Asif inquired from PIA officials whether anyone had shown interest in buying the property. He then noted that Trump had wanted to purchase it.

At this, PIA Investment Limited Managing Director Najeeb Sami disclosed that the American president “is still showing interest in Roosevelt”.

Privatisation programme could have have been halted

Last month, the CCOP had directed the Privatization Commission to hire a financial adviser to convert the hotel property to a joint venture project. However, no development was made in this regard after the commission failed to engage a financial adviser due to the high cost. The commission wants the finance ministry to bear the cost.

Read more: Trump makes offer to buy PIA’s Roosevelt Hotel

An official of Privatization Commission had informed that government would not privatize the Roosevelt Hotel. He said that the hotel would have been run through a joint venture. The official had informed that the government would pursue the privatization programme after Covid-19 situation. He said that Privatisation Division has shortlisted 10 entities which were scheduled to be sold out in the financial year 2020-21 to achieve budgeted revenue of Rs100 billion.

Roosevelt Hotel Sale: one privatisation programme among many

The planning minister said that the transaction structures will now be presented before the Cabinet Committee on Privatization (CCOP) and subsequently before the federal cabinet for approval.

Read more: 150 pilots at PIA have dubious licenses: Aviation Minister

Privatisation Commission is anticipating to sale out much delayed two RLNG power plants 1223 MW Ballocki Power Plant and 1230 MW Haveli Bahadur Power Plants, the revival of Pakistan Steel Mills plan, SME bank Limited, Services International Hotel Lahore and Jinnah Convention Centre, Islamabad in the second quarter of next financial year or by end of December 2020. Financial advisors for the privatisation programme had previously been assigned as well; this time the privatisation programme may actually happen.

Financial advisors to seek approval for the privatisation programme

In accordance with the transaction structure approved by the federal cabinet, the Privatisation Commission will invite the ‘Expression of Interest’ (EOIs) from potential investors both national and international which will be submitted to PC Board, CCoP and the federal cabinet for approval.

A senior official of the finance ministry briefed the committee on ‘Sarmaya-e-Pakistan Limited’ (SPL). He said the finance division incorporated SPL as a holding company, with the approval of the federal cabinet in February 2019 consisting of three ex-officio members and eight independent directors.

According to the official, the key objective of SPL is to direct, supervise and coordinate the management of subsidiary companies to be transferred to SPL gradually from line ministries. The committee was also informed that six out of eight independent directors including the chairman of the board resigned from SPL in May-July 2019 due to which SPL became dysfunctional. The committee recommended that the vacant positions of the board of Sarmaya-e-Pakistan Limited may be filled immediately.

The meeting was chaired by Syed Mustafa Mahmud, was attended by Minister for Privatisation, Muhammad Mian Soomro, Parliamentary Secretary for Privatisation and MNAs Zulfiqar Ali Khan Dullah, Khurram Shahzad, Shandana Gulzar Khan, Faheem Khan, Syma Nadeem, Shandana Gulzar Khan, Muhammad Pervaiz Malik, Syed Hussain Tariq, Sikandar Ali Rahopota besides senior officers from the ministries of privatisation, finance, aviation division and PIAIL.

The government had budgeted Rs150 billion from privatization programme in last fiscal year. However, it failed to generate any amount due to Covid-19 that had halted the privatization programme.

GVS News Desk with additional input by other sources