Pakistan considers privatising Roosevelt Hotel in NY amid uncertainty over foreign interest

ISLAMABAD: A deputy minister-led committee in Pakistan has suggested privatising the Roosevelt Hotel in New York through open bidding after Saudi Arabia failed to express formal interest in acquiring the property owned by Pakistan International Airlines (PIA).

According to the Express Tribune, the committee, led by Minister of State for Finance Ali Pervaiz Malik, has proposed that the hotel be sold via competitive bidding. However, the committee has left the decision on whether to outright sell the hotel, develop it as a joint venture, or lease it for 99 years to the Privatisation Commission.

This recommendation comes after a two-year-long uncertainty over the hotel’s fate, which has been exacerbated by the change in the US administration. The committee, formed by Deputy Prime Minister Ishaq Dar in November last year, was tasked with evaluating the legal, financial, technical, and international aspects of the hotel’s potential transaction structures.

According to sources from the Privatisation Commission, the committee has recommended that the hotel be privatised through competitive bidding after being informed that no foreign government had made a formal offer to acquire the hotel under a government-to-government arrangement. This lack of foreign interest highlights the challenges Pakistan faces in attracting significant investments from abroad.

Also read: Privatisation commission defers decision on financial advisor for Roosevelt Hotel

The Roosevelt Hotel, considered among the top 1% of the most expensive properties in the world, has been offered twice to Saudi Arabia, with no progress made. The Privatisation Commission had previously hired Jones Lang LaSalle Americas as a financial advisor for the privatisation transaction at a cost of Rs2.1 billion.

The committee also assessed potential commercial risks to the hotel, including the risk of being declared a heritage site, which could have restricted its use and development. The Foreign Office and the outgoing US Ambassador Donald Blome lobbied to resolve this issue, but the committee was cautioned about potential risks stemming from the policy direction of the incoming US administration.

The Privatisation Commission has been given the task of deciding the mode of privatisation, with full access to the financial advisor’s report. The commission has raised concerns over governance and relationship management issues in joint venture projects, warning of possible litigation.