ECC approves Rs24 bln for security; reforms barter with Afghanistan, Iran, Russia

By Staff Reporter

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet approved approximately Rs24 billion in supplementary grants on Thursday to fund security measures and urgent costs tied to the shuttered Roosevelt Hotel in New York, while endorsing reforms to a barter trade mechanism for commerce with Afghanistan, Iran, and Russia.

The decisions, made during a meeting chaired by Finance Minister Muhammad Aurangzeb, highlight Pakistan’s efforts to balance fiscal prudence with pressing economic and security demands. The Roosevelt Hotel, a historic Manhattan property owned by Pakistan International Airlines Investment Limited (PIA-IL), took center stage, with the Ministry of Defence requesting $17.5 million to cover immediate liabilities.

Officials say restarting operations could cost up to $20 million, pending a joint-venture deal through the Privatisation Commission. The ECC, however, flagged the Defence Ministry’s estimates as inflated, directing PIA-IL to consult with the Finance Ministry to refine the figures and resubmit, according to an official statement.

The hotel, which ended its $200 million lease with New York City to house migrants earlier this year, faces mounting financial pressures. The Privatisation Commission is advancing a long-term joint venture for the Roosevelt’s multi-purpose redevelopment, with seven proposals under review. The process stalled in July when adviser Jones Lang LaSalle exited over a potential conflict of interest. A new adviser is expected within two weeks, targeting deal completion within six months, sources said.

Separately, the ECC allocated Rs4 billion to compensate residents for land acquired for the Defence Complex in Islamabad, with funds from the Finance Division and the Capital Development Authority. It also approved Rs20 billion for the Interior Ministry to maintain law and order, to be released in tranches, and Rs174.8 million for the Frontier Corps KP (North) in Peshawar for law-enforcement needs.

In a key trade reform, the ECC backed amendments to a June 2023 business-to-business barter trade framework for Afghanistan, Iran, and Russia—the latter two under US sanctions. Businesses have faced challenges, including restrictions on sanctioned products and a requirement to complete imports before exports, hampering trade.

After consultations, the Ministry of Commerce proposed aligning the mechanism with general Export and Import Policy Orders, removing the restrictive product list. The ECC approved a draft Statutory Regulatory Order to implement the changes.