The Senate Standing Committee on Aviation was told on Tuesday that the PIA’s Roosevelt Hotel in New York was not being sold but would either be renovated or reconstructed in future.
“Either the Roosevelt Hotel will be renovated or it will be demolished to build a 100-storey building,” PIA Chairman Arshad Malik told the panel of the upper house, which met under the chairmanship of Senator Mushahidullah Khan.
Malik observed that the purpose of reconstructing the hotel was to reduce the expenses and turn it into a profit-making entity.
He told the body that the current market value of Roosevelt Hotel assessed by M/s Deloitte was $562 million.
The committee chairman pointed out that the value of hotel had already been assessed $1700 million and that it was a profit-making entity a year ago. He asked how it was now going into losses.
The PIA chairman replied that since 2015, the property had been making profits and incurring losses as well and added that $105 million were due towards it.
He further noted that government had paid $145 million for debt and other expenses and added that the entity might had been taken into possession after being declared bankrupt in case of non-payment of the loans.
Malik maintained that the financial advisory of the Privatisation Commission was looking into this matter and would decide the fate of the property.
He observed that Roosevelt Hotel, a 19-storey building located at a prime location, was acquired in 1978 on partnership, from its profits and as a part of PIA diversification strategy.
In 1999, he noted, it acquired 100% shareholding at $36.5 million from its resources and without any aid from the government.
He told the panel that the property had more than 1,000 rooms, having an area of 43,313 square feet, adding it was run by the world's premier Hotel Management Company “Interstate Hotel and Resorts” USA.
The PIA CEO said the declining business of the hotel further aggravated due to the coronavirus pandemic, which could increase the losses to $6 million per year.
The committee sought a detailed briefing from the PIACL Board of Directors in the next meeting on the financial stability plan to transform the national flag carrier into a profit-making entity.
The body also took up a harassment case of PIA and listened to both the parties.
Senator Sherry Rehman was of the view that the accused of harassment, who was posted as HR Manager in PIA, should be repatriated to the parent department with a recommendation to hold a fresh inquiry against the officer.
"It is a classic textbook case of harassment and the officer should be removed from his post and sent back to its original organisation," she observed.
Senator Nauman Wazir Khattak suggested to further look into the case by arranging a special sitting of the committee members, besides giving another opportunity of hearing to the complainant and accused.
The meeting was attended by Senators Manzoor Ahmed Kakar, Syed Muzaffar Hussain Shah, Shaheen Khalid Butt and Sajjad Hussain Turi, senior officials of Aviation Division and PIACL among others.
With input from APP
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