Roosevelt Hotel to be given on lease.
A decision was made by the Cabinet Committee to hire a firm to lease the asset in New York.
ISLAMABAD: The government decided on Monday to employ a company to lease the Roosevelt Hotel in New York, a move that may assure the optimum use of the underutilised asset situated in the most valuable location.
According to the finance ministry, the Cabinet Committee on Privatization (CCOP) reiterated its prior judgement regarding the Roosevelt Hotel.
The CCOP’s proceedings also underlined once more how ineffectively the nation could manage even a privatisation transaction for less than Rs2 billion.
The CCOP, which is led by Finance Minister Ishaq Dar, has once more forwarded the sale of the Services International Hotel, Lahore, to the Law Ministry.
The committee also voted to remove the floundering SME Bank from the privatisation initiative, which gave the Privatization Commission (PC) and SME Bank a solid foundation on which to be wound up.
The CCOP decided to uphold its earlier decision dated July 2, 2022, which directed the Privatization Commission to begin the process of appointment of a financial adviser (FA) to undertake the anticipated leasing of the Roosevelt site for meeting up a joint venture project for prospective mixed-use development, through the best-suited mode of privatisation.
Typically, hiring a financial advisor takes four months or so. After that, it takes a long time for them to create a roadmap. The Roosevelt Hotel in New York could be designated as a heritage structure by the local government.
The New York government has been contacted by the Pakistani Foreign Office to ask them not to designate the building as a historic site.
Over the course of the hotel’s closure, Pakistan has spent more than $150 million to cover a variety of expenses.
The CCOP, which was led by the former finance minister Asad Umar, resolved in October 2018 to consider whether high-rise hotels might be built on the site of the Roosevelt Hotel using a public-private partnership (PPP).
Deloitte was hired by PIA-IL, the parent business of the Roosevelt Hotel and a fully owned subsidiary of PIAC, to do a feasibility study. In July 2019, Deloitte advised that the land should be redeveloped into a mixed-use area with an office tower over retail and condominium as the optimum use for the hotel.
The Privatization Commission was then given the go-ahead by the CCOP in July 2020 to begin the process of selecting a financial adviser to handle the leasing of the Roosevelt site. The employment of the adviser was started by the previous administration, and in September 2020, the board of the Privatisation Commission accepted the draught terms of reference (ToRs).
However, due to ongoing litigation involving the Reko Diq project and Tethyan Copper Co. in a British Virgin Islands (BVI) court, the Attorney General of Pakistan (AGP) advised delaying the matter (TCC).
Because the earlier approvals were only centred on the recommendations of a Deloitte report, the Privatisation Commission urged the CCOP for reaffirmation of the previous decision or guidance otherwise, as judged necessary.
A overview of the privatisation of the Services International Hotel was presented by the Privatization Commission. According to the finance ministry, the CCOP forwarded the matter to the Law and Justice Division for revision of its prior opinion after careful consideration.
The highest offer, made in August 2021 by Faisal Town (Pvt) Ltd for Rs1.95 billion, was accepted by the federal cabinet in October 2021.
After receiving complaints that an asset had been sold for less, the government established a subcommittee, which after careful consideration determined that the previous assessment was fair at the time the asset was auctioned.
The CCOP received the report of the subcommittee and instructed the commission to resubmit the summary after consulting the Law and Justice Division.
However, the Ministry of Law recommended that the Federal Investigation Agency (FIA) be asked to look into the problem of a new valuation and determine what might be built there.
Due to a delay in the sale document being signed, the title being transferred, and the property being given to him, Faisal Town Ltd. sent a legal notice on October 4, 2022.
The Privatization Commission summarised the privatisation of SME Bank and updated the meeting on its status, according to the finance ministry.
The CCOP voted to delist SME Bank from the privatisation programme after carefully debating the Privatization Commission board’s recommendation, allowing the SBP and Finance Division to move forward with alternate possibilities.
Shortlisted bidders included Pakistan Kuwait Investment Company (Pvt) Ltd, Pak Libya Holding Company (Pvt) Ltd, Veon Holding, and Saudi Pak Industrial and Agricultural Investment Company.
