Islamabad: Pakistan anticipates significantly higher foreign exchange earnings from the sale of the Roosevelt Hotel, a prestigious property in Manhattan, New York, following a revised mixed-use sale proposal put forward by US advisers.
However, potential bidders for Pakistan International Airlines have expressed apprehension due to the European Union’s ban on Pakistani airlines, which could potentially impact the bidding price for the national carrier currently up for sale.
This was the focal point of a press briefing on Wednesday led by Privatisation Minister Abdul Aleem Khan, alongside federal secretaries Jawad Paul and Usman Bajwa from the privatisation division and commission respectively.
Mr. Bajwa disclosed that Jones Lang LaSalle Incorporated, a global real estate services firm based in Chicago, had presented an extensive due diligence report to the government proposing three options for the privatisation structure.
The report recommended doubling the current floor area ratio of the Roosevelt Hotel from 1:15 to 1:30, potentially increasing the retail sellable area from 650,000 square feet to about 1.3 million square feet. Minister Aleem Khan highlighted the additional value this could bring, emphasizing his personal accountability for ensuring the transaction achieves its optimal value.
The cabinet had previously endorsed a joint venture with international investors for mixed-use development, and Mr. Bajwa indicated that the options—outright sale, long-term lease, or joint venture operations—would be presented to the Cabinet Committee on Privatisation for consideration. He anticipated inviting expressions of interest (EOIs) by early August.
Regarding PIA’s privatisation, Mr. Bajwa noted that the six pre-qualified bidders were currently conducting due diligence. These bidders, which include Air Blue, Lucky Group, Arif Habib Group, Blue World, Pak Ethanol, and FlyJinnah, have expressed concerns about the EU Aviation Safety Agency’s ban on Pakistani airlines, including PIA.
Mr. Bajwa clarified that while PIA had been cleared by the EUASA, regulatory issues within the Civil Aviation Authority were delaying the lifting of the ban. He assured that comprehensive due diligence by the CAA would address these concerns.
Minister Khan underscored the importance of resolving these issues promptly to ensure robust competition among bidders. He also emphasized the separation of PIA’s hotel proceeds from its core operations, which would help in repaying the airline’s Rs630 billion debt over a decade.
In conclusion, Minister Khan reaffirmed the government’s commitment to transparency in the privatisation process, aiming to maximize returns while addressing national economic priorities. He lamented past setbacks in privatisation and called for accountability from those responsible for previous losses incurred by state-owned enterprises.
