[NYguy]

In the last board meeting, Privatisation Minister Abdul Aleem Khan, also the chairman of the PC board, as well as another official hinted at selling the hotel under a negotiated government-to-government deal, sources said.

In case of the negotiated deal with any Gulf country, according to the sources, the government would not be required to give advertisement in the press and it might not enter into a joint venture.

So, it seems its not just the developers in the US who have their eyes on the prize. That seems to be the holdup here...


https://tribune.com.pk/story/2492159/no-decision-on-roosevelt-sale-model

No decision on Roosevelt sale model
PC board discusses giving hotel on lease or developing it as joint venture

August 30, 2024

There was also no consensus whether to privatise the hotel through a competitive bidding process or through a government-to-government deal. Roosevelt Hotel is located in the heart of New York and part of the 1% most sought-after land of the metropolitan city. Federal Minister for Privatisation Abdul Aleem Khan presided over the meeting of PC board. It was for the second time in 10 days when the board met but could not approve a transaction model for final endorsement by the Cabinet Committee on Privatisation.

"Federal Minister Abdul Aleem Khan observed that in light of the recommendations of the Privatisation Commission board, final decision will be taken by the Cabinet Committee on Privatisation," said a statement issued by the Ministry of Privatisation.

A majority of the board members were of the view that the government should enter into a 99-year lease agreement. Some others, including the privatisation minister, emphasised that the hotel should be developed as a joint venture and a government-to-government deal should be struck.

Proponents of the lease agreement were of the view that Pakistan needed money and that was possible by entering into a lease agreement, which would be a constant source of earning without selling land. Under the lease model, the land value will be determined now by assuming the full potential of the property. In this scenario, Pakistan will sign a contribution agreement and a ground lease agreement in 2027.

However, some members were of the view that the hotel should be developed under a joint venture but through a negotiated government-to-government deal.

Surprisingly though, the financial adviser told the board that there were chances of cartelisation in the case of open bidding.

The adviser said that under the joint venture scenario, the government would contribute 100% of the land value to the joint venture partner and the land value would be determined on the basis of full land potential, including the 32-storey building. Both parties will sign a contribution agreement immediately but the joint venture agreement will be signed in 2027.

.....some members argued that the joint venture would take time and Pakistan needed funds to pay off some of the PIA liabilities parked in a holding company. Roosevelt Hotel is the property of PIA.

The adviser recommended the selection of a strong development partner, having a strong balance sheet, strong market reputation and experience in managing complex zoning permissions.