By Staff Reporter
ISLAMABAD: Pakistan is set to finalise the transaction structure for the privatisation of the iconic Roosevelt Hotel in New York at the next meeting of the Cabinet Committee on Privatization (CCoP), the government said on Saturday.
The decision marks a critical step in the long-debated sale of one of Pakistan’s most prominent overseas assets, amid swirling speculation over its valuation and structure. Located in the heart of Midtown Manhattan, the Roosevelt Hotel is owned by Pakistan International Airlines Investment Limited (PIAIL) and occupies a full city block on Madison Avenue and 45th Street.
A historically significant property, it has remained a high-profile yet politically sensitive holding for Pakistan, often caught in the crosshairs of economic necessity and national sentiment.
The Privatization Commission moved quickly to dispel rumors about the hotel’s price tag. “The base price and expected proceeds from the privatisation of the Roosevelt Hotel will depend on the transaction structure and final terms approved by the government,” the Commission said in an official handout.
It explicitly rebutted local media reports claiming a $100 million floor had been set, stressing that “no base price has been determined for the property and that valuation will only be finalised at the time of bidding.” “Reports circulating in the media regarding the hotel’s valuation are misleading. No price has been fixed for the Roosevelt Hotel,” the Commission said in the statement, underscoring that the deal’s potential value hinges on the yet-to-be-decided transaction framework.
The clarification extended to comments attributed to Muhammad Ali, Advisor to the Prime Minister on Privatisation, with the Commission noting he had been misquoted. “Ali merely referred to an initial partial payment, not the full sale price,” it said.
The privatization process kicked off in earnest in March, when the government instructed the Privatization Commission to proceed with a competitive bidding process for the underutilized property. But the final shape of the deal, whether an outright sale, a joint venture, or a 99-year lease, remains up in the air, with a decision expected at the CCoP next meeting.
The Commission’s board has pushed for exploring a government-to-government (G2G) arrangement, keeping all three transaction structures in play. That stance diverges from the financial advisor’s assessment, which leaned toward a joint venture as the path to maximise returns.
The advisor laid out three options: a full sale of the hotel land, a joint venture with a development partner, or a 99-year ground lease. It pegged the joint venture as offering the highest potential gains, while an outright sale, though less risky, would deliver the lowest proceeds. The lease model, it noted, promises moderate to high returns over a longer horizon, with the added perk of letting Pakistan retain land ownership.
The CCoP will make the final call based on the Ali Committee report, which weighed the legal, financial, technical, and geopolitical implications of each approach against the backdrop of shifting dynamics in the US market. “The final pricing and transaction terms will be determined in the upcoming meeting of the Cabinet Committee on Privatisation,” a Commission spokesperson said, signaling the weight of the forthcoming decision.
Complicating matters, no formal offers have materialized from foreign governments under a G2G framework, a sign of tepid international appetite amid Pakistan’s challenging economic and investment climate.
The Commission flagged this as a potential roadblock to securing a high-value deal. Closer to home, the New York City government dealt a blow by issuing a notice of early termination for its lease of the hotel, effective July, a full year ahead of the agreement’s scheduled end.
The move could cost Pakistan an estimated $80 million in lost business, with the hotel previously fetching $210 per room during its third year under the lease. Even if a deal comes together, timing remains a concern.
The financial advisor warned that an outright sale could take up to three years to fully realize proceeds, as buyers would need to secure permits and settle payments post-approval. A 99-year lease, while potentially more appealing due to its lower upfront cost, would stretch payouts over decades.
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