ISLAMABAD: Prime Minister’s Adviser on Privatisation Muhammad Ali hasfirmly dismissed any possibility of the historic Roosevelt Hotel in NewYork falling under American administration control, emphasising that thegovernment is accelerating its divestment on an emergency basis. Thisclarification comes amid ongoing speculation about the fate of valuablestate assets following the recent successful privatisation of PakistanInternational Airlines. The adviser’s statement underscores Pakistan’sstrategic push to maximise returns from underutilised properties whileadvancing broader economic reforms. Such developments signal a criticalphase in the country’s efforts to reduce fiscal burdens through targetedasset management.
The Roosevelt Hotel, a landmark 16-storey property in Midtown Manhattanowned through PIA Investments Limited, has long been viewed as a high-valueasset with significant redevelopment potential. Muhammad Ali highlightedthat an outright sale is not under consideration, instead favouring a jointventure model involving redevelopment into a modern high-rise structure.This approach aims to attract substantial equity and debt financingestimated at up to five billion dollars, potentially more than doubling thevalue of Pakistan’s stake despite a reduced ownership share to around fiftypercent. The strategy reflects lessons from past delays and seeks to avoidundervaluation in a direct disposal scenario.
Recent progress on the Roosevelt Hotel follows the landmark privatisationof Pakistan International Airlines, completed in December last year when aconsortium led by Arif Habib Corporation secured a seventy-five percentstake for one hundred and thirty-five billion rupees. This transactionmarked a major breakthrough after multiple failed attempts, injecting freshcapital and shifting operational responsibility to private hands. MuhammadAli has indicated that the formal handover of PIA to the new owners isscheduled for April this year, subject to final regulatory approvals andcontractual fulfilments, paving the way for revival efforts.
The Arif Habib-led consortium has outlined ambitious plans for PIA’sturnaround, including fleet expansion from the current seventeenoperational aircraft to thirty-eight in the coming years. Reports suggestthat around one hundred and twenty-five billion rupees will be invested inrehabilitation, infrastructure upgrades, and route expansion. Thegovernment has imposed conditions such as retaining all employees for atleast one year to ensure a smooth transition and protect workforceinterests. This move is expected to restore the national carrier’scompetitiveness in regional and international markets.
Experts note that separating high-value non-core assets like the RooseveltHotel from the PIA privatisation deal was a deliberate decision to preservenational interests. While some foreign properties integral to airlineoperations transferred to the buyer, major holdings such as the New Yorkhotel remained under government control. The Cabinet Committee onPrivatisation earlier approved a joint venture framework after evaluatingoptions including outright sale, long-term lease, and developmentpartnerships. This structured approach addresses previous challenges,including the annulment of prior financial adviser processes and the needfor fresh expressions of interest.
The urgency expressed by Muhammad Ali for the Roosevelt Hotel privatisationaligns with broader fiscal objectives, as Pakistan seeks to meetcommitments under international financial arrangements while reducinglosses from state-owned enterprises. Redevelopment prospects in New YorkCity’s prime real estate market have generated considerable interest frompotential investors, promising significant economic returns. However, theprocess requires careful navigation of legal, regulatory, and marketfactors to ensure optimal outcomes for the national exchequer.
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As the April timeline for PIA operations under new management approaches,attention remains focused on how the consortium will implement its visionfor revival. The privatisation of the national airline has already beenhailed as a symbolic victory for economic liberalisation, potentiallysetting precedents for future divestments in sectors like powerdistribution and infrastructure. Muhammad Ali’s assurances regarding theRoosevelt Hotel reinforce the government’s commitment to transparent andvalue-maximising strategies in handling strategic assets.
Habib Consortium, Privatisation Commission
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