PIA's Roosevelt Hotel leased to NY govt for 3 years against $220m

• 1,025 rooms of hotel handed over to NYV government for 3 years.
• As many as 479 employees are working in the hotel.
• Initial earnings from the hotel have already started pouring in.

LAHORE: Minister for Aviation and Railways Khawaja Saad Rafique said Sunday that a contract has been signed with the New York City government to operate the renowned Roosevelt Hotel of the Pakistan International Airlines (PIA) situated in New York for three years.

In a press conference held at the Allama Iqbal International Airport, the minister said that revenue of $220 million would come to the country as a result of the agreement.

Giving details of the agreement, he said that 1,025 rooms of the hotel would be handed over to the New York City government for three years and the initial earnings from the hotel had started pouring in.

Under the agreement, one-year business was guaranteed. However, he hoped the hotel business would continue for all three years.

He said there were several issues involved in the Roosevelt case like the hotel was at risk of being declared a landmark after which the building could not be altered.

However, now the danger had subsided for at least three years. The minister said that earlier, the hotel had been closed since the COVID-19 period, and an amount of $25 million was being spent on the closed building and $20 million were pending as liability.

He said that 479 employees were working in the hotel, which was a big number, and it was difficult for the hotel to terminate them from jobs due to US labour laws.

However, now after the agreement, this number would be decreased to 77 at the end of the contract period. He thanked the New York City government for its cooperation.

Privatisation

Regarding the outsourcing of airports in Pakistan, the minister said that three international airports, Lahore, Karachi and Islamabad, were being outsourced and made it clear that outsourcing did not mean privatisation.

In a first, the Islamabad airport would be outsourced. He said that only the operation of the airports would be outsourced and not the land or property.

As a result of the arrangement, new contractors would develop, improve and operate the airports, and after the completion of the agreement period, the contractors would hand over the airports to the government again.

He said the current administration had put it on track and soon agreements would be signed with the best international airport operators. A credible company, the International Finance Corporation (IFC) of the World Bank, had been given the task of outsourcing the airports as no Pakistani company had experience in this regard.

He said that several airports, including Madina Munawwarah, Istanbul, Dubai and others, were being operated through the model being introduced in Pakistan now.

The minister said that the contracts would be given through open bidding and several international contractors were showing interest in this regard.

He clarified that no employee would be expelled from service.

Upgradation

Rafique said that the Civil Aviation Authority (CAA) was also launching high-profile projects in which runways at the Quetta Airport would be reconstructed and upgraded.

He said the Faisalabad runway was already under construction which would be operational soon and Lahore airport’s runways would also be upgraded.

Rafique said that upgrade work of the Karachi Airport was already undergoing while Gwadar International Airport was also under construction and would become operational soon.

For the first time, the Hajj operation from the Quetta Airport was successfully in process and the people of Balochistan were going for Haj through this airport.

Two more airports, Sukkur and Dera Ismail Khan, would be converted into international airports to facilitate the citizens of the area.

Plane impound

Discussing the issue of a B777 of Pakistan International Airlines (PIA) stopped by the authorities in Kuala Lumpur, Malaysia, the minister said that the issue was resolved by the legal team of PIA in 72 hours and now the plane had reached Pakistan after carrying the passengers.

Giving details, he said the aeroplane was a leased aircraft and the owner company unethically went to the Malaysian court where the court seized the flight in an ex-party decision.

PIA was not heard, he said, adding that if the court had heard PIA, the incident would not have happened.

He thanked the Malaysian ambassador in Pakistan for his cooperation.

He said PIA was a complicated case, adding that several steps were needed to upgrade the department. Some improvements had been made in the flights like better food quality, seating and services, but it needed several other things.