In a statement issued on Saturday, the Commission clarified that no base price has been determined for the property and that valuation will only be finalised at the time of bidding.
“Reports circulating in the media regarding the hotel’s valuation are misleading. No price has been fixed for the Roosevelt Hotel,” it stated.
Read More: Roosevelt privatisation moves ahead
The clarification also addressed comments attributed to Muhammad Ali, Advisor to the Prime Minister on Privatisation, saying he had been misquoted.
“Ali merely referred to an initial partial payment, not the full sale price,” the Commission noted.
The Commission added that all terms and conditions related to the hotel’s privatisation would be finalised with government approval. “The final pricing and transaction terms will be determined in the upcoming meeting of the Cabinet Committee on Privatisation (CCoP),” a spokesperson said. A formal agreement for the transaction is expected to be signed within the current fiscal year, it added.
Earlier in March, the government instructed the Privatisation Commission to proceed with the privatisation of the historically significant but underutilised Roosevelt Hotel through a competitive bidding process. However, it left the final decision on whether to pursue an outright sale or opt for a joint venture or lease model open to further deliberation.
The Commission’s board had recommended exploring privatisation under a government-to-government (G2G) arrangement, keeping all three transaction structures — outright sale, joint venture, or a 99-year lease — on the table for negotiations. However, the board’s recommendation differed from the financial advisor’s proposal, which favoured a joint venture model to maximise returns.
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The financial advisor put forward three potential approaches: a full sale of the hotel land, a joint venture with a development partner, or a 99-year ground lease.
The advisor assessed the joint venture to offer the highest potential gains while noting that an outright sale, though least risky, would yield the lowest proceeds. The lease option would deliver moderate to high returns over a longer period while allowing the government to retain land ownership.
The final structure of the Roosevelt Hotel transaction is to be decided by the CCoP based on recommendations in the Ali Committee report. The Ali Committee was tasked with assessing legal, financial, technical, and geopolitical implications of various transaction structures in light of changing dynamics in the United States.
The Commission also informed the committee that no formal offers had been received from any foreign government under a G2G arrangement — highlighting the limited international interest in the hotel amid Pakistan’s current economic and investment climate.
Read More: US terminates $220m Roosevelt Hotel deal
In a further development, the New York City government has issued a notice of early termination for its lease of the hotel, effective July — a full year before the agreement’s expiry. This unexpected move could cost Pakistan an estimated $80 million in lost business. The hotel had been leased to the city at a rate of $210 per room during its third year.
The financial advisor’s report noted that even under an outright sale scenario, the complete realisation of proceeds could take up to three years, as the buyer would be required to obtain all relevant permits and pay the balance post-approval.
The 99-year lease model would involve a longer-term payout structure but may attract more interest due to lower upfront financial commitment.