Islamabad: The government has assured the International Monetary Fund to sell 5 to 7 government institutions, including PIA.
Read more:https://timelinenews.com.pk/government-faces-new-tax-targets-and-conditions-to-secure-imf-tranche/
According to sources, the government has assured to sell PIA by July, but the future of the Roosevelt Hotel New York is still undecided, while the New York City government has also given a notice to terminate the hotel’s lease agreement worth $228 million early.
Officials told the IMF about the practically stalled privatization program that they will try to sell 5 to 7 institutions soon, which include PIA, 3 financial institutions and 3 power distribution companies. The government is hopeful of selling the Agricultural Development Bank Limited by November.
The global lender was told that the Cabinet Committee on Privatization will decide whether to sell the most expensive Roosevelt Hotel or give it under a joint lease agreement.
The PIA-owned Roosevelt Hotel is located in an area considered one of the most expensive properties in the world. The hotel has 1,025 rooms and was leased by Pakistan to the New York City government for three years in July 2023 on behalf of the Immigrant Housing Business.
But the IMF was told that the New York City government had given a notice of termination of the contract, effective from July of the year before its expiration. This would result in a loss of about $80 million.
The city government had leased the hotel for a third year at $210 per room. In November last year, the CCOP suspected that President Donald Trump’s anti-immigration policies could affect the $228 million three-year contract.
The IMF was told that officials were exploring alternative business opportunities. However, despite hiring a succession of financial advisers, the government could not make a clear decision on the privatization of the Roosevelt Hotel.
Pakistan has hired Jones Lang LaSalle USA as its financial advisor for the Roosevelt privatization transaction at a cost of Rs2.1 billion. Its fees include disbursements and a success fee of 0.95% of the sale proceeds.
The IMF was told that the CCOP would soon decide on the mechanism for privatizing the hotel. The committee, headed by Petroleum Minister Ali Pervez Malik, has recommended the privatization of the Roosevelt Hotel through an open bid. But the CCOP has not yet taken up the committee’s report for a decision.
The Privatization Commission had last year told the government that under the government’s arrangements, foreign governments should formally declare their interest before invoking the Intergovernmental Commercial Transactions Act. According to the committee’s proceedings, as of the end of December, no foreign government had shown formal interest in acquiring the hotel.
The special committee recommended that the hotel be sold through an open and competitive bid. However, the committee also left it to the Privatization Commission to decide whether to sell the hotel outright, develop it as a joint venture or lease it for 99 years.
The Privatization Commission has assured the IMF that PIA will be sold by July. The IMF was told that the government wants to sell the power distribution companies of Faisalabad, Islamabad and Gujranwala by December.
It was informed that the UAE is interested in buying First Women Bank as a fully-fledged commercial bank and an agreement is likely to be signed by May. However, the UAE wants to buy it under an agreement between governments rather than an open bid.
The government is hiring a financial advisor to sell the Agricultural Development Bank. It hopes to sell the bank by November. The authorities have again assured to sell the House Building Finance Corporation next month after several previous deadlines expired.
