ISLAMABAD: The government is getting renovated New York’s Roosevelt Hotel – owned by the bleeding national flag carrier Pakistan International Airlines (PIA) – at a cost of US$27 million to convert it into a ‘mixed-use’ building believing that this change will make it more profitable.
Sources told The Express Tribune that government has given a go-ahead to the PIA to carry out a feasibility study on the mixed-use building of Roosevelt Hotel by June 30, 2019 and submit a report to the cabinet body on privatisation.
The Roosevelt Hotel was completed in 1924 and is named in honour of former US president Theodore Roosevelt, who had previously been the governor of New York State. It has 1,015 rooms, including 52 suites. Some of the suites are among the most luxurious available in Manhattan.
Officials said the Cabinet Committee on Privatisation was informed in a recent meeting that renovation of the Roosevelt Hotel owned was currently being undertaken at the cost of US$27 million which would be completed by April 2020.
During the meeting, cabinet members were told that all studies indicated that the Roosevelt site could be converted into a mixed-use building. The Civil Aviation Division (CAA) had submitted a way forward to the cabinet committee to develop Roosevelt’s site into a mixed-used building. It was informed that renovated hotel would continue to help generate incremental profits.
It was also proposed that process to convert Roosevelt site into a mixed-used building be initiated and a professional study was recommended to take an informed decision.
In this regard, some timelines were given which include that upon approval, a professional study would be accomplished in six months. Based on the outcome of feasibility study, potential partners would be engaged within three to six months. Essential clearances from New York Department (NYD) would be initiated. Upon completion of different measures, the project would be launched.
The cabinet directed the Aviation Division and the PIA to carry out feasibility study on the mixed-use building of the Roosevelt Hotel by June 30, 2019 and submit a report.
Earlier, the PIA had submitted a plan to hand over some of its key assets such as Roosevelt Hotel to creditors in an effort to pay off liabilities of Rs352 billion and make the carrier financially viable.
Secondly, it was proposed to transfer the assets including the Roosevelt Hotel in New York and Sribe Hotel in Paris to pay off PIA’s liabilities worth Rs352 billion out of Rs406 billion.
However, these options were not accepted. Officials said despite given full autonomy by the government, the PIA could not achieve desired results in the past four years.
The cabinet members noted that the number of employees of the PIA was not the problem. Rather poor performance in customer service coupled with leakages in procurement and lack of accountability led the organisation to the verge of collapse.