ISLAMABAD: The federal government is to revive inter-ministerial committee headed by Deputy Chairman Planning Commission to prepare recommendations for resolution of administrative and financial issues of PIA’s Roosevelt Hotel, New York.
Sharing the details, sources said, ECC while approve a summary regarding financial challenges of the Roosevelt Hotel Corporation (RHC) on August 6, 2020 directed to form a committee headed by Deputy Chairman Planning Commission and comprising secretaries of Finance Division, Aviation Division and Law & Justice Division to discuss the financial and legal implications of the issue and submit its report. Accordingly, after thorough deliberations the committee submitted its recommendations’ about financial support of $ 142 and $ 30.3 million to RHC respectively for consideration of ECC.
The ECC approved recommendations of the committee in its meetings held on September 2, 2020 & June 16, 2021. Hence, the committee ceased to exist after completion of its task.
Subsequently, a meeting was held under the chairmanship of the Adviser to the Prime Minister on Finance and Revenue (now Finance Minister) on November 16, 2021 to discuss prevailing issue/challenges of RHC. The MD PIA-IL while highlighting the issues requested the Chairman ECC for constitution of a committee with clear mandate to deliberate on RHC matters from time to time. Taking the delicacy of the said proposal, it was decided to constitute the proposed committee
Foregoing in view, the committee comprising the following officers with its mandate is proposed for consideration/approval of ECC: (i) Deputy Chairman Planning Commission (Chairman); (ii) Secretary Finance (Member); (iii) Secretary Aviation Division(Member) and (iv) Secretary Law and Justice Division (Member).
Terms of Reference (ToRs) of the Committee will be as follows: (i) disposal of furniture/fixture and equipment etc; (ii) to resolve issues of ex Union employees of RHC including terminal benefits and pension etc; (iii) to guide PIA-IL/RHC management to protect RHC from land mark decision; and (iv) any other financial or administrative issues from time to time till final fate of RHC is decided by the competent forum.
During a high level meeting, presided over by the then Finance Advisor held on November 16, 2021 with regards to proposed designation of Roosevelt as Landmark, participants were apprised that PIA-IL had received three emails from IHR, the Management Company of Roosevelt, that Community Board 5 (CB5) Landmarks Committee, New York, was considering a request for evaluation for landmark designation of Roosevelt. In this regard, meetings of CB5 were schedule on November 30, 2021, and December 9, 2021, and thereafter recommendations would be submitted to Landmark Preservation Commission by CB5.
Participants’ attention was drawn to the meeting held on August 24, 2021, and chaired by the Finance Minister, wherein, among others, following decisions were taken: (i) as PIA-IL has no in-house expertise, therefore, a Technical Advisor/Consultant needs to be appointed who would vet the ToRs of the Financial Advisor by Privatization Commission and evaluate the feasibility report without explicitly referring RHC; and (ii) present scope of privatisation, ie, leasing out RHC site as approved by ECC needs to be extended to have more options, ie, RHC site may be leased/disposed-off as is and where is basis and demolition of present building of RHC and its reconstruction through joint venture project for mixed use development, ie, office and retail.
The Minister for Finance desired an update on the decisions, to which Secretary Privatisation Commission (PC) apprised the participants that the Cabinet Committee on Privatisation (CCoP) at its meeting held on November 15, 2019 on a summary moved by Aviation Division had approved constitution of a Task Force for framing Terms of Reference (ToRs) for leasing the Roosevelt’s site for setting up a Joint Venture Project. The decision of CCoP was ratified by the Cabinet on November 27, 2019. Therefore, this needed to be amended to incorporate the additional scope desired by the participants of the meeting held on August 24, 2021.
After having discussed the matter at length, it was decided that Aviation Division would submit a summary to CCoP/Cabinet, and seek an amendment to CCoP/Cabinet’s earlier decisions. Aviation Division/PIA were directed to take note of Land Mark Committee procession and take necessary action in consultation with the office of AGP.
The meeting was apprised that on Sep 15, 2021, the ECC had approved funding of $ 130.3 million which includes RHC/PIA-IL’s funding of $ 30.3 million. Since Roosevelt was not generating any cash flows to support the debt, therefore, MoF had directed that the parent company, ie, PIACL would borrow the total sum of $ 130.3, and, thereafter, it would disburse $ 30.3 million to PIA-IL forthwith.
After having discussed the matter at length, it was decided that Finance Division would issue a DO to Ministry of Aviation advising it to expedite the disbursement of funds of $ 30.3 million by PLACL to PIA-IL/RHC. It was also agreed that PIA-IL/RHC would continue to follow up the matter with PIACL.
On the NBP’s loan of $ 142 million, participants were apprised that as per NBP’s loan agreement, the principal repayment of NBP’s loan of $ 142 million to be made in four equal quarterly installments of $ 35.5 million starting December 31, 2021. The loan is maturing on Sept 30, 2022. In view of RHC’s cash constraints, it was requested that NBP’s loan of $ 142 million along with markup be rolled over for the next 2 years.
The meeting decided that PIA-IL/RHC, being borrower, would formally request the roll over for loan along with markup for next 2 years with the lender, ie, NBP.
Regarding the decision pertaining to the Furniture, Fixture and Equipment (FF&E) of the Roosevelt, the participants decided that the Committee constituted by ECC in the past on the Roosevelt under the Chairmanship of Dy Chairman, Planning Commission, and comprising of secretaries Aviation, Finance and Law be revived and entrusted to deliberate on FR&E or any other matter(s), and submit its recommendations to the Competent Authority at the earliest.
Copyright Business Recorder, 2022