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Pakistan Assures IMF of PIA Sale by July, Uncertainty Over Roosevelt Hotel
Pakistan has assured the IMF of PIA’s privatization by July and plans to sell 5-7 entities, including banks and power firms. Uncertainty looms over Roosevelt Hotel after an early lease termination.
ND
by News Desk
2025-03-11
Pakistan Assures IMF of PIA Sale by July, Uncertainty Over Roosevelt Hotel

The Pakistani government has assured the International Monetary Fund (IMF) that the privatization of Pakistan International Airlines (PIA) will be completed by July 2025. However, uncertainty surrounds the fate of Roosevelt Hotel in New York, as a $228 million lease agreement was terminated prematurely by the US government.

Privatization Plan: PIA & More Entities Up for Sale

A local English daily reported, citing sources, that Pakistan’s briefing to the IMF outlined plans to privatize 5 to 7 state-owned enterprises, including:

✅ PIA (Pakistan International Airlines) – by July 2025
✅ Three financial institutions
✅ Three power distribution companies

The Agricultural Development Bank (ZTBL) is also set for privatization, with a target sale deadline of November 2025.

Roosevelt Hotel Case: $80 Million Loss & Uncertainty

The Roosevelt Hotel, owned by PIA, is a prime property in New York with 1,025 rooms. In July 2023, it was leased to the New York City Government to house immigrants for three years. However, in July 2024, the US authorities terminated the lease agreement one year early, causing an estimated $80 million loss to Pakistan.

The Cabinet Committee on Privatization (CCOP) will soon decide whether to sell the hotel or operate it under a joint lease agreement. While a report suggests an open auction, no final decision has been made.

PIA Privatization: Uncertain Prospects

The Privatization Commission informed the IMF that its first attempt to sell PIA failed due to weak due diligence, with a sole bidder offering Rs10 billion against the minimum Rs85 billion bid requirement.

Now, the government is re-evaluating the market before issuing an Expression of Interest (EOI) by the end of this month. However, there is low confidence in a successful sale.

🚨 Key Challenges:
🔸 Two investors withdrew earlier, demanding removal of 18% sales tax & Rs45 billion debt write-off.
🔸 The IMF has now allowed flexibility on both conditions.
🔸 Restoring European flight routes is considered critical to attracting buyers.

Power Sector Privatization

The government aims to sell three power distribution companies from Faisalabad, Islamabad, and Gujranwala by December 2024.

📌 Decision Pending: Whether to sell all three together or privatize them individually.
📌 IMF Inquiry: Whether these companies have any commercial debt outstanding.
📌 No power generation companies will be privatized in 2024.

Financial Institutions Privatization

💰 First Women Bank Limited: UAE is interested in purchasing the bank, with a deal expected by May 2024. However, UAE seeks a direct government-to-government deal, not an open auction.

💰 Agricultural Development Bank (ZTBL): The financial advisor hiring process is underway, and ZTBL’s sale is expected by November 2024.

💰 House Building Finance Company: The sale process has faced multiple delays, but a final sale is expected next month.

Conclusion: Economic & Political Implications

Pakistan’s IMF-backed privatization plan aims to offload struggling state-owned enterprises, yet political uncertainty, economic challenges, and investor concerns could impact the outcome. The success or failure of these privatization efforts will significantly influence Pakistan’s economic trajectory in the coming years.

 
Tagged:

Pakistan

IMF

PIA

EconomicReforms

Privatization

RooseveltHotel
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