Planned Sale of PIA-Owned Roosevelt Hotel Gets Delayed

The privatization process of Pakistan’s Roosevelt Hotel in New York has encountered a serious setback following the resignation of the global real estate firm that had been appointed as the financial adviser (FA) for the deal.

This development is expected to result in substantial financial losses and delay the entire privatization process by at least 18 months.

Significant Financial Implications

The delay is projected to cost Pakistan’s national exchequer more than $50 million, due to continued debt servicing and maintenance expenses, as the iconic hotel remains underutilized and closed to the public.

The Roosevelt Hotel, a property owned by Pakistan International Airlines (PIA), had secured a $142 million loan from a financial institution in 2020. Since then, debt-related costs have continued to accumulate in the absence of meaningful progress on the asset’s sale or redevelopment.

Ongoing Burden Until New Adviser Appointed

Unless a new financial adviser is appointed and a fresh due diligence process is completed, the financial strain on the government will persist. So far, the Privatization Commission has not yet initiated any formal process to appoint a replacement adviser, which further adds to the uncertainty surrounding the timeline of the project.

Concerns Raised Over Management of Sale

Former caretaker Minister for Privatization, Fawad Hassan Fawad, commented on the situation, reiterating the significance of the Roosevelt Hotel as a prime real estate asset in New York. He emphasized that any transaction involving the hotel must be conducted with complete transparency and professionalism.

He also highlighted that, in earlier considerations, a development plan had been proposed for the site, which included the construction of a 1.6 million square foot facility—pointing to the vast potential of the asset if handled strategically.

This latest blow raises concerns not only about the future of the Roosevelt Hotel but also about the broader challenges faced by Pakistan in monetizing its international assets effectively and in a timely manner.