PIA not selling Roosevelt Hotel in New York, Senate body told

RAWALPINDI: Pakistan International Airlines (PIA) is not selling its Roosevelt Hotel in New York but it would be closed down by December 31 for renovation and future utility plans.

This was stated by PIA Chief Executive Officer (CEO) Air Marshal Arshad Malik while briefing the Senate Standing Committee on Aviation on Tuesday.

The committee meeting was held with Senator Mushahidullah Khan in the chair.

The meeting was also informed about PIA’s plan to transform the national flag carrier into a profit earning entity.

The CEO said the Privatisation Commission had been approached through the federal government to hire a financial consultant through an international tendering process to devise a future course of action for the hotel, considering all the available options, including demolishing the building and to build a new one or to renovate the existing premises.

Renovation or repair work or demolishing the building for reconstruction are under consideration, says CEO

He said it would be decided later whether necessary renovation or repair work would be carried out or the existing building should be demolished for reconstruction and raising a new high-rise hotel for which local bylaws were conducive.

Roosevelt Hotel, a 19-storey building located at a prime location in New York, was acquired in 1978 on partnership from its own profits and as a part of PIA diversification strategy.

In 1999, the CEO said, it acquired 100pc shareholding at $36.5 million from its own resources and without any aid from the government.

He briefed the meeting that the property had more than a thousand 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 committee was told that the current market value of the hotel, assessed by M/s Deloittee, was $662 million based on the highest and best use.

The financial position of the hotel had been in the ‘Red, ’ mainly due to debt servicing, unionisation, dilapidated building, infrastructure, rooms and public area conditions, which needed immediate upgrade and major repairs. The PIA CEO said the declining business of the hotel further aggravated due to the coronavirus pandemic, which could increase the loss to $6 million per year.

He also said PIA was operating 13-year-old planes whereas other airlines were operating three-year-old aircraft.

The chairman of the committee expressed concerns over dubious licences of some pilots and said it caused a heavy dent to the PIA. He said PIA should consider reopening of the routes where the Covid-19 related issues had been addressed, especially Japan and China.

The committee also took up a harassment case.

Senator Sherry Rehman said the accused, who had been posted as the HR manager in the PIA, should be repatriated to its parent department with recommendation to hold a fresh inquiry against him.

“It is a classic textbook case of harassment and the officer be removed from his post and sent back to its original organisation,” she observed and added: “It is a black mark on his parent department which is prestigious.”After hearing both the victim and the accused in camera, the committee recommended to surrender the accused to his parent department.

Senator Sherry Rehman said CAA affairs should also be brought under discussion by the committee as the pilot licences had been issued by it.

The meeting was attended by Senators Manzoor Ahmed Kakar, Syed Muzafar Hussain Shah, Mohammad Asad Ali Khan Junejo, Noman Wazir Khattak, Sajjad Hussain Turi, Mohammad Khalid Hussain Bizenjo and senior officials from the Aviation Division and PIA.