ISLAMABAD:
Exciting developments are underway regarding the iconic Roosevelt Hotel in New York. Recently, Pakistan’s Cabinet Committee on Privatization (CCOP) took a decisive step by reversing a seven-month-old decision that left its future in limbo. This change aims to put the hotel’s sale back on the right track, reflecting a much-needed commitment to transparent governance.
Led by Adviser to the Prime Minister on Finance, Abdul Hafeez Shaikh, the CCOP has empowered the Ministry of Privatization to select a financial adviser. This adviser will aid in finalizing the sale’s structure for the Roosevelt Hotel, a valuable asset currently owned by the struggling Pakistan International Airlines (PIA).
For years, various administrations—from Pervez Musharraf’s leadership to the current government—have sought to offload or lease this prestigious hotel. The Pakistan Muslim League-Nawaz (PML-N) government even pursued a valuation of the hotel through a third-party agreement, but past efforts have largely gone unfruitful.
After an unnecessarily prolonged period, the CCOP has wisely chosen a legal path to navigate this complex transaction, which should set a positive precedent for how government-owned entities are managed in the future.
The committee’s latest meeting focused solely on the Roosevelt Hotel’s privatization. In a move to streamline the process, they have decided to decommission the previous ministerial task force that was tasked with developing terms of reference for leasing the hotel site. This is a significant shift aimed at tapping into the expertise of financial advisers instead.
In 2019, a task force had been formed to carve out leasing plans, but it met with opposition mainly because the Aviation Division felt it was left out of the decision-making process. This led to questions about the legality and the required compliance with the Privatisation Ordinance of 2000.
Interestingly, the CCOP’s change of heart also comes after discussions highlighting fundamental questions raised by the Aviation Division. They pointed out the need for a more inclusive strategy that recognizes the roles of established institutions like the Privatisation Commission.
Moreover, discussions concerning the timely sale of the Roosevelt Hotel have been held with the Prime Minister on multiple occasions recently. The committee has instructed the Privatisation Commission to engage Deloitte to refresh its prior recommendations on the best use for the hotel site. Their previous report suggested that a mixed-use redevelopment would yield the most significant benefits.
However, as the timeline for this transaction evolves, experts estimate that it could take between one to one-and-a-half years to complete the sale, depending on the overall investment climate and recovery from the effects of Covid-19.
In sum, while the Roosevelt Hotel’s future remains a work in progress, this recent decision by the CCOP marks a pivotal moment in Pakistan’s efforts to streamline its privatization processes. This development not only opens the door for potential financial gains but also helps restore faith in the government’s commitment to fiscal responsibility.
Published in The Express Tribune, July 3rd, 2020.
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