ISLAMABAD: The decision of global real estate giant to quit as the financial adviser for privatisation of Pakistan’s Roosevelt hotel is all set to cause massive losses to the national exchequer, with a possible delay in accomplishing this transaction.
Meanwhile, an official communication has been sent by the financial body to the finance ministry to inquire about the fate of its extended loan of $142 million to Roosevelt Hotel in New York after the decision of global real estate firm to step down citing a conflict of interest as the reason to quit as the financial advisor (FA) from this transaction. The finance ministry has not yet replied to the financial institution, but it seems that the debt servicing will continue burdening the national exchequer. The financial body had lent the money to the Roosevelt Hotel in 2020.
If the Privatisation Commission accelerates the process of hiring an FA and accomplishing due diligence, it requires at least one-and-a-half years period. So this delay in privatisation of Roosevelt will burden the national exchequer at least $50 million as the cost of debt servicing and maintenance, keeping in view the requirements in New York.
When former caretaker minister for privatisation, Fawad Hassan Fawad, was contacted on Wednesday, he said the prime land of Roosevelt hotel could not be matched with any other property, and he paid tributes to the vision of those who had acquired this piece of land. He said it would be the prerogative of the incumbent Privatisation Commission to hire anyone as an FA, but such a transaction requires a professional firm with the mandate to undertake its assignment professionally and transparently. He said that they had planned to construct a 1.6 million square foot area in the Roosevelt Hotel and then go ahead with selling out certain shares in a transparent manner. It is one of the best properties owned by the PIA in the hub of the city, he added.
