Privatisation of Roosevelt Hotel: PIAIL given permission for in-camera briefing

ISLAMABAD: A parliamentary panel on Thursday has granted permission to the management of the Pakistan International Airlines Investment Limited (PIAIL) to give in-camera detailed briefing on the privatisation of the Roosevelt Hotel, New York, in the next meeting of the committee.

The committee deferred the briefing on Roosevelt Hotel, which was on the agenda of the meeting on the request of the managing director PIAIL.

The in-camera briefing on the privatisation of the hotel will held in the next meeting and the media persons will not be allowed.

The managing director, PIAIL, requested the committee that due to some issues we may be allowed to give in-camera briefing on the Roosevelt Hotel.

He also requested that a financial advisor (FA) was being appointed by the Privatisation Commission to undertake the envisaged leasing of the Roosevelt site for setting up a joint venture project for prospective mixed use development, through the best suited mode of privatisation as delineated in the PC Ordinance, 2000.

The committee recommended arranging in-camera detailed briefing on Ms Deloitte report regarding privatisation of Roosevelt Hotel in another meeting.

The 10th meeting of the National Assembly's Standing Committee on Privatisation was held under the chairmanship of Syed Mustafa Mahmud for comprehensive briefing by the Ministry of Finance, the Privatisation Division, the Aviation Division, and the PIAIL.

The committee was informed that six out of eight independent directors including the chairman of the board resigned from the SPL in May-July 2019, due to which SPL became dis-functional.

The committee recommended that the vacant positions of the Board of Sarmaya-e- Pakistan Limited may be filled immediately.

The senior joint secretary, Ministry of Finance, briefed the committee on Sarmaya-e- Pakistan Limited (SPL).

He informed that the Finance Division incorporated SPL as a holding company, with the approval of the Federal Cabinet on 13 February 2019, which consist of three ex-officio members and eight independent directors.

The key object of the SPL is to direct, supervise and coordinate the management of subsidiary companies/PSCs to be transferred to the SPL gradually from line ministries.

The minister for privatisation stated that it was not a conducive business environment for the aviation industry because of air restrictions due to Covid-19.

"It would be not a wise decision to put PIA on privatisation," he added.

He said the aviation sector and renowned airlines worldwide had become bankrupt and were facing a financial crunch.

Defending the decisions of the Privatisation Commission, he said that investors were always interested in the privatisation of profit-making government entities and government gets good price.

He further said the profit-making entity did not get good price than it would face difficulties in selling them again.

He said the government had aimed at increasing foreign inflow through privatisation of loss-making entities.

The committee chairman observed that the privatisation of K-Electric was a worse example of privatisation.

He further said that one company was sold rights to distribution and supply of power to whole Karachi which promoted the company's monopoly in Karachi.

He argued that K-Electric had blocked at least 15 power transmission and distribution companies in Karachi, which was a mega populous city.

He further said that same mistakes were made in the privatisation of the PTCL; however, entrance of other telecom sector companies ended the PTCL monopoly.

Copyright Business Recorder, 2020