The Privatization Commission has dismissed media reports suggesting that the government has set a price of $ 100 million for the sale of Roosevelt Hotel in New York and called such claims misleading and inaccurate.
In a statement issued on Saturday, the Commission clarified that no basic price of the property has been set and that the valuation will only be completed at the time of bid.
“Reports circulating in the media about the hotel’s valuation are misleading. No price is set to the Roosevelt hotel,” it said.
Read more: Roosevelt -Privatization goes on
The clarification also related to comments attributed to Muhammad Ali, adviser to the Prime Minister on privatization and said he had been wrongly quoted.
“Ali simply referred to an initial partial payment, not the full sale price,” the Commission noted.
The Commission added that all terms and conditions related to the hotel’s privatization would be completed with the government’s approval. “The final prices and transaction conditions will be determined in the upcoming meeting of the Cabinet Committee on Privatization (CCOP),” a spokesman said. A formal agreement on the transaction is expected to be signed within the current financial year, it added.
Earlier in March, the government instructed the Privatization Commission to continue with the privatization of the historically significant but under -utilized Roosevelt -Hotel through a competitive bid process. However, it left the final decision as to whether to pursue a direct sale or choose a joint venture or leasing model open to further considerations.
The Commission’s Board of Directors had recommended exploring privatization in accordance with a government-to-government (G2G) scheme, holding all three transaction structures-direct sales, joint venture or a 99-year-old lease-on-table for negotiations. However, the recommendation of the Board of Directors differs from the financial advisory proposal that favored a joint venture model to maximize the return.
ALSO READ: ‘Sell Roosevelt via open bid’
The financial adviser made three potential approaches: a full sale of the hotel country, a joint venture with a development partner or a 99-year-old land lease.
The advisor assessed Joint Venture to offer the highest potential gains while noting that a direct sale, though at least risky, would provide the lowest revenue. The lease would deliver moderate to high returns over a longer period, while the government allows the government to retain land possession.
The final structure of the Roosevelt Hotel transaction must be decided by CCOP based on recommendations in the Ali Committee report. The Ali Committee was tasked with assessing legal, economic, technical and geopolitical implications of various transaction structures in light of changing dynamics in the United States.
The Commission also informed the Committee that no formal offers from any foreign government had been received during a G2G event – which highlighted the limited international interest in the hotel in the middle of Pakistan’s current economic and investment climate.
Read more: USA ceases with $ 220m Roosevelt Hotel Deal Deal
In further development, the New York City government has issued a notice of early termination for its lease by the hotel, with effect from July – a whole year before the end of the agreement. This unexpected step could cost Pakistan estimated $ 80 million in lost business. The hotel had been rented to the city at a rate of $ 210 per night. Room in the third year.
The financial advisory report noted that even during a direct sales scenario, the complete realization of the proceeds could take up to three years as the buyer would be required to obtain all relevant permits and pay the balance after approval.
The 99-year-old leasing model would involve a long-term payout structure, but may attract more interest due to a lower advance financial commitment.
