ISLAMABAD: The proposed disposal of Roosevelt Hotel, New York, will land in the federal cabinet's lap on Tuesday (today) as Privatisation Commission has expressed inability to appoint an FA due to weak financial position of PIA, well-informed sources told Business Recorder.
On July 2, 2020, the CCoP was informed that the issue of early disposal of Roosevelt Hotel was also raised before the Prime Minister on several occasions. The meeting was chaired by the Prime Minister on the restructuring of PIACL held on June 8, 2020, and directed that Aviation shall submit its proposals for JV/long-term lease of Roosevelt Hotel before the CCoP for its consideration within one week. It was also directed that a special meeting of CCoP shall be held, at the earliest, to consider the proposals of Aviation Division, in consultation with, Ministry of Privatisation, and submit/ present its proposal, for revision for constitution of Taskforce for privatisation of Roosevelt Hotel, owned by PIA-IL before the CCoP to review its decision of November 15, 2019 duly ratified on December 3, 2019 whereby the said task force was constituted on December 13, 2019.
The committee was informed that the Privatisation Commission (PC) Board in its meeting held in December 2019 recommended the following for consideration of CCoP: (i) PC to appoint Financial Advisor (FA) for setting up a JV project; (ii) amend the composition of RTF by allowing exclusion of legal and financial consultants of Roosevelt Hotel Corporation and include MD, PIA-IL; and (iii) approval of the ToRs of the Task Force.
During the course of discussion, it was stated that for all the three options regarding the Roosevelt Hotel, i.e. its continuation as such, disposal by selling out in the market, leasing out the hotel as a JV, an FA is to be appointed to study and make recommendations in this regard. It was also briefed that M/s Deloitte has completed the comprehensive study regarding the Roosevelt Hotel as per the ToRs prescribed by PIA-IL, and has recommended the way forward. The members of the committee were of the opinion that since the study has already been completed, therefore, the PC may continue its work on the basis of the report of M/s Deloitte.
Special Assistant to the Prime Minister on Overseas Pakistanis, Zulfi Bukhari, argued that the task may be handled by the PC in consultation with the Board of Investment (BoI) and the model adopted by the PC in case of land bank privatisation may be considered for adoption.
The representative of Petroleum Division was of the opinion that it is not privatisation, rather it is a corporate decision so the Board of Directors of PIA-IL can take a decision on its own. He termed it a commercial restructuring. Minister for Planning, Development and Special Initiatives, Asad Umar agreed with the contention of the representative of the Petroleum Division and gave the example of concession agreements in OGDCL by its BoD.
Minister for Aviation asked the committee to de-notify the task force for privatisation of Roosevelt Hotel as set up by the CCoP in its meeting held on November 15, 2019 and ratified by the Cabinet on December 3, 2019. Secretary Privatisation Division suggested to convene a meeting between the Attorney General for Pakistan, Minister for Aviation, Finance Division and Privatisation to clarify certain aspects of this transaction.
Minister for Privatisation informed the forum that since the financial condition of PIA is not good, Privatisation Commission shall not be in a position to bear the expenses for appointment of Financial Advisor, hence, Finance Division will have to come to the rescue.
The cabinet is also expected to discuss electricity situation in Karachi as PTI local leadership has recommended the government allows other companies to operate in Karachi .
Other agenda items are as follows: (i) addition of offenses in the schedule of AML Act, 2010 under section 42 of the AML Act, 2010 through notification in the official gazette; (ii) allocation of sectors F-12 and G-12 land Islamabad to Federal Government Employees Housing Authority; (iii) extradition of Shariq Raza from Pakistan to UK; (iv) approval for signing service agreement between the Nadra and International Organisation for Migration (IOM) on Deployment of the Readmission Case Management System (RCMS); (v) appointment of Munawar Hussain as CEO Agro Food Processing (AFP) facilities, Multan; (vi) appointment of three directors on the BoD of STEDEC; and (vii) proposal for granting FBR permission to hire lawyers without seeking approval from Law and Justice Division.
Copyright Business Recorder, 2020