The Privatization Commission (PC) board has once again failed to reach a consensus on the Roosevelt Hotel privatization strategy in New York City. Members remain divided over whether to lease the prime property on a 99-year basis or pursue a development plan through a joint venture. The discussion also lacked agreement on whether to privatize the Roosevelt Hotel via a competitive bidding process or a government-to-government arrangement.
Located in the heart of New York, the Roosevelt Hotel sits on one of the most sought-after pieces of real estate in the metropolitan area. Federal Minister for Privatization Abdul Aleem Khan chaired the meeting, marking the second time in ten days that the board convened without approving a transaction model for the Cabinet Committee on Privatization’s endorsement.
Minister Abdul Aleem Khan noted that a final decision will be made by the Cabinet Committee based on the recommendations from the PC board. While a majority of board members support a 99-year lease, others advocate for the Roosevelt Hotel to be developed as a joint venture, emphasizing the potential benefits of a government-to-government deal.
The financial adviser presented three options: an outright sale, a joint venture deal, or a 99-year lease for the Roosevelt Hotel. Their recommendation suggests that a joint venture would maximize financial returns for Pakistan, with the hotel’s land value serving as the government’s contribution.
According to the adviser’s report, the joint venture approach for the Roosevelt Hotel could yield the highest value for the government, while proponents of the lease agreement argue that this method would provide a steady income stream without selling the valuable land. The proposed lease would result in fixed payments to Pakistan over 99 years while maintaining government ownership of the Roosevelt Hotel property.
Despite the support for leasing, some members believe a joint venture with a well-established development partner would be more beneficial for the Roosevelt Hotel. The adviser warned that competitive bidding could lead to cartelization, highlighting the risks associated with that approach. Under the joint venture model, the government would provide 100% of the land value of the Roosevelt Hotel to the partner, with agreements finalized in 2027.
In conclusion, while the Roosevelt Hotel represents a key asset for the government, the path forward remains uncertain as the board continues to weigh its options carefully.
