Pakistan’s Cabinet Committee on Privatisation (CCOP) approved a joint venture model for privatising the Pakistan International Airlines (PIA)-owned Roosevelt Hotel in New York, a key step in the government’s economic reform agenda.
The CCOP evaluated three options for the future of the 1,015-room historic hotel, which has been closed since 2020: outright sale, a joint venture with multiple options, and a long-term lease. After careful consideration, they selected the joint venture model proposed by the financial advisor, Jones Lang LaSalle (JLL). This approach is designed to maximise long-term value by offering flexibility, multiple exit strategies, and reduced fiscal risk. The hotel could potentially yield four to five times its base valuation of $100 million.
On the same day, the Privatisation Commission Board, chaired by Minister Muhammad Ali, pre-qualified four consortia for the divestment of Pakistan International Airlines (PIA), according to Dawn. The selected groups include:
1. Lucky Cement and Hub Power Holdings
2. Kohat Cement and Metro Ventures
3. Arif Habib Corporation, Fatima Fertiliser, City Schools, and Lake City Holdings
4. Fauji Fertiliser and Airblue
This selection followed a rigorous evaluation of the qualifications of five investors and aligns with a $7 billion bailout from the International Monetary Fund (IMF). PIA’s significant losses, amounting to $2.5 billion, highlight the urgency of this process.
Read: Pakistan Denies $100M Price Tag for Roosevelt Hotel Privatisation
The Roosevelt Hotel, a Manhattan landmark since 1924, was leased by PIA in 1979 and fully acquired in 2000, per Wikipedia. The 2023–2024 lease to New York City for migrant housing generated $220 million but ended amid controversy.
The joint venture, which has been recommended by Deloitte since 2019, focuses on the redevelopment of mixed-use areas. With Pakistan aiming for ₨86 billion ($306 million) in privatisation proceeds, the hotel’s deal is politically sensitive.
