The three-year contract with NYCG commence d on May 15 —Twitter/_PIA

 

PIA Gets Nod for Roosevelt Hotel Rental Deal

Islamabad: The government on Wednesday allowed the Pakistan International Airlines-Investment Ltd (PIA-IL) to sign an agreement with the New York City Government (NYCG) for the utilization of Roosevelt Hotel on rental for three years after reaching a settlement deal with the hotel union.

The decision was taken at a special meeting of the Economic Coordination Committee (ECC) of the Cabinet that also allowed two supplementary grants worth Rs153 million as legal expenses in a water dispute with India and Rs4 billion local currency cover to secure disbursement of equivalent loan from the World Bank. Finance Minister Ishaq Dar presided over the meeting.

Based on a briefing and summary of the Ministry of Aviation on challenges and re-opening of Roosevelt Hotel, New York, the ECC “approved the execution of settlement agreement with the hotel union and the New York City Government”, said an announcement, adding that it further gave nod for withdrawal of pending lawsuits by the Roosevelt Hotel with the hotel union and the City of New York pursuant to the terms of the settlement agreement with the union.

The ECC also directed the PIAL, on the request of the Aviation Ministry, to engage and share its business plan with the National Bank of Pakistan (NBP) regarding the rollover of a $142m loan for another two years, i.e., until Dec 31, 2024.

The meeting was informed that a four-member negotiating committee constituted by the ECC on April 28 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 utilization of the 1,025 hotel rooms for a period of three years for Immigrant Housing Business by the NYCG.

The resultant agreements (with NYCG and the staff union) have already been cleared by the PIA-IL board of directors on May 8. The board had sought ECC’s concurrence before signing a settlement agreement with the union and the NYCG. Over three years, the Pakistan-owned Roosevelt Hotel would thus get about $19m in net cash flows against its 1,025 rooms instead of incurring over $160m carrying costs for the same period.

The offer envisaged a 14-month guaranteed period along with a 4-month termination notice period (minimum of 18 months). The contract is to commence on May 15 and entails per night rent for each room at $200 for the first year, $205 for the second year and $210 for the third year. The New York City government will cover the taxes etc. and make a payment of $1.74m monthly rent on the first of each month in advance… - Dawn