After reaching an agreement with the hotel union, the government on Wednesday permitted Pakistan International Airlines-Investment Ltd (PIA-IL) to sign an agreement with the New York City Government (NYCG) for the leasing of the Roosevelt Hotel for three years.
The decision was made at a special meeting of the Cabinet’s Economic Coordination Committee (ECC), which also approved two supplementary grants worth Rs153 million as legal expenses in a water dispute with India, as well as Rs4 billion in local currency cover to secure the disbursement of an equivalent loan from the World Bank. The meeting was presided over by Finance Minister Ishaq Dar.
Based on a briefing and summary from the Ministry of Aviation on the challenges and re-opening of the Roosevelt Hotel in New York, the ECC “approved the execution of settlement agreement with the hotel union and the New York City Government,” according to an announcement, adding that it also approved the withdrawal of the Roosevelt Hotel’s pending lawsuits with the hotel union and the City of New York under the terms of the settlement agreement with the union.
At the request of the Aviation Ministry, the ECC also asked the PIAL to engage and share its business strategy with the National Bank of Pakistan (NBP) about the rollover of a $142 million loan for another two years, till December 31, 2024.
ECC also approves Rs153m for legal expense in water dispute with India
The meeting was informed that on April 28, a four-member negotiating committee formed by the ECC and led by the Secretary Aviation Division had a final round of negotiations with the NYCG and the staff union of Roosevelt Hotel Co (RHC) for the use of 1,025 hotel rooms for Immigrant Housing Business by the NYCG for a period of three years.
The PIA-IL board of directors approved the resulting agreements (with NYCG and the employee union) on May 8. Before reaching a settlement agreement with the union and the NYCG, the board sought ECC’s approval. Over three years, the Pakistan-owned Roosevelt Hotel would thus generate approximately $19 million in net cash flows from its 1,025 rooms rather than expending over $160 million in carrying costs.
The offer called for a 14-month guaranteed duration as well as a 4-month termination notice period (minimum of 18 months). The contract begins on May 15 and includes a per-night rent of $200 for the first year, $205 for the second year, and $210 for the third year. The New York City administration will cover the taxes and make a monthly rent payment of $1.74 million in advance on the first of each month.
