Dawn Investigation Cell
Islamabad: The government has assured the International Monetary Fund to sell 5 to 7 government institutions including PIA.
According to Dawn sources, the government has assured to sell PIA by July, but the future of the Roosevelt Hotel New York is still undecided, while the New York City government has also given a notice to terminate the $228 million lease agreement of the hotel prematurely.
Officials told the IMF about the practically stalled privatization program that they will try to sell 5 to 7 institutions soon, which include PIA, 3 financial institutions and 3 power distribution companies. The government is hopeful of selling the Agricultural Development Bank Limited by November.
The global lender was told that the Cabinet Committee on Privatization will decide whether to sell the world’s most expensive Roosevelt Hotel or lease it under a joint lease agreement.
The PIA-owned Roosevelt Hotel is located in an area considered one of the most expensive properties in the world. The hotel has 1,025 rooms and was leased by Pakistan to the New York City Government on a three-year lease in July 2023.
However, the IMF was told that the New York City government had given a notice of termination of the contract, effective from July a year before its expiration. This would result in a loss of about $80 million.
The city government had rented the hotel for a third year at $210 per room. In November last year, the CCOP suspected that President Donald Trump’s anti-immigration policies could affect the three-year $228 million contract.
The IMF was told that officials were exploring alternative business opportunities. However, despite hiring one financial advisor after another, the government could not make any clear decision regarding the privatization of the Roosevelt Hotel.
Pakistan hired Jones Lang LaSalle USA as the financial advisor for the Roosevelt privatization transaction for Rs 2.1 billion. Its fee includes disbursements and a success fee of 0.95% of the sale proceeds.
The IMF was told that the CCOP would soon decide on the mechanism for privatization of the hotel. The committee, headed by Petroleum Minister Ali Pervez Malik, has recommended privatization of the Roosevelt Hotel through an open bid. However, the CCOP has not yet taken up the committee’s report for a decision.
The special committee recommended to the CCOP that the hotel be sold through an open and competitive bidding. However, the committee also left the decision to the Privatization Commission whether to sell the hotel outright, develop it as a joint venture or lease it for 99 years.
It has been informed that the UAE is interested in buying First Women Bank as a fully-fledged commercial bank and a deal is likely to be signed by May. However, the UAE wants to buy it through a government-to-government agreement rather than an open bid.
The government is hiring a financial advisor to sell the Agricultural Development Bank. It hopes to sell the bank by November.
Leave a Reply