US president a potential buyer of PIA’s Roosevelt hotel, MPs told
July 16, 2020 09:47 AM
US President Donald Trump is interested in buying PIA-owned Roosevelt Hotel in New York, it emerged on Wednesday during a meeting of National Assembly's Standing Committee on Privatisation.
MD PIA Investments Dr Najeeb Sami informed the lawmakers that the US president Trump, a name all too familiar in American real estate, had expressed interest in acquiring the iconic hotel in the past and was still keen on purchasing it.
It has earlier emerged that Trump wanted to convert the iconic hotel in the heart of New York City’s Manhattan borough into another Trump Tower. Billionaire-turned-president Trump already owns seven luxury hotels and several resorts and clubs in a number of major cities across the US.
In his briefing to the committee, Sami said that Roosevelt is a three-star hotel which had been profitable for 99 years. However, the hotel suffered a loss of $1.5 million last year, the official added. He said it was not profitable for PIA to run the entire hotel on its own and it should, therefore, be replaced with offices and hotels. "It has been decided to give Roosevelt Hotel on lease on a long-term basis," Sami told the lawmakers.
The PIA-owned 19-storey hotel with 1,025 rooms plus allied facilities in New York is considered a valuable property that also carries cultural significance for Pakistan. It has remained in the news for the last several years over its proposed auction. However, the management of PIA in the past had always rejected the claims of the auction, etc.
The hotel was acquired by PIA Investment Limited on lease during the year 1979 with an option to purchase the property. The airline had purchased the hotel for $36.5 million against a demand of $59.5m by contesting a lawsuit against the owner in 1999. The Roosevelt has been managed by Interstate Hotels & Resorts since 1997
Earlier this month, the Cabinet Committee on Privatisation (CCoP) had decided against selling off the Roosevelt and to run it through a joint venture instead. The CCoP had directed the Privatisation Commission to appoint a financial adviser to start the process for the transaction in light of a report by accounting firm Deloitte from July 2019 which recommended that “the highest and best use of the Roosevelt Hotel property is to redevelop the site into a mixed-use of primarily an office tower over retail and condominium.”
PML-N leader Kh Asif also confirmed that Trump was interested in buying the hotel. Asif said his party did not oppose privatisation but this wasn't a suitable time to privatise any entity because the coronavirus pandemic has caused market prices of almost everything to fall.
He said the PML-N government should have privatised the PIA during its tenure. He acknowledged that it was a mistake on PML-N's part that it remained unable to privatise the national flag carrier during its tenure.
Kh Asif said the rights of employees should be protected whenever privatisation is carried out and they should be provided enough funds to start their own businesses. People who own real-estate businesses abroad should not be made part of the body deciding the hotel's fate as it could lead to corruption, Asif added.
Privatisation Minister Muhammad Mian Soomro informed the committee that various options were currently being looked into regarding the fate of the Roosevelt, adding that a financial adviser will take the decision regarding leasing out the hotel.