Pakistan has committed to selling its national carrier, Pakistan International Airlines (PIA), by July 2025 as part of its obligations to the International Monetary Fund (IMF). Meanwhile, the fate of New York’s Roosevelt Hotel remains uncertain after U.S. authorities announced plans to terminate a $228 million lease agreement a year ahead of schedule, potentially costing Pakistan $80 million in lost revenue.
Pakistan’s Privatization Drive Gains Momentum
In recent discussions with the IMF regarding its stalled privatization program, Pakistan outlined plans to divest between five and seven state-owned enterprises. According to reports from The Express Tribune, this includes PIA, three financial institutions, and three power distribution companies.
Zarai Taraqiati Bank Limited (ZTBL) is among the financial institutions slated for privatization, with the government aiming to finalize its sale by November 2024. Additionally, the House Building Finance Company is expected to be sold as early as next month.
Uncertainty Looms Over Roosevelt Hotel’s Future
A major point of contention remains the Roosevelt Hotel, a prime Manhattan property owned by PIA. The Cabinet Committee on Privatization (CCOP) will determine whether to sell the hotel outright or lease it under a joint venture. A special committee led by Federal Minister for Petroleum Ali Pervaiz Malik has recommended selling the hotel through open bidding, as Saudi Arabia has not formally expressed interest in acquiring the property.
The Roosevelt Hotel, with 1,025 rooms, is located in one of the most valuable real estate zones in the world. In July 2023, Pakistan leased the hotel to the Immigrant Housing Business through the New York City Government for three years. However, New York authorities have now decided to end the agreement a year early, citing policy changes. The premature termination of the deal is projected to cost Pakistan approximately $80 million in lost revenue, as the city government had been paying $210 per room for the third year of the lease.
IMF Conditions and Market Readiness for PIA’s Sale
Pakistan’s commitment to privatizing PIA remains a critical aspect of its economic reform agenda. The government has set July 2025 as the deadline for the sale of the loss-making airline, and authorities are currently assessing market conditions before issuing an Expression of Interest (EOI) to attract investors later this month.
Officials revealed that at least three potential bidders are interested in acquiring PIA, including two that had previously withdrawn due to unfavorable tax and liability conditions. The IMF has now agreed to relax key conditions, including waiving the 18% sales tax on aircraft leases and removing Rs. 45 billion in liabilities from PIA’s balance sheet. These concessions, along with the reopening of European routes, are expected to boost investor confidence.
As Pakistan accelerates its privatization agenda, the success of these efforts will be closely watched by international investors and financial institutions. The sale of PIA and the resolution of the Roosevelt Hotel’s future will play a crucial role in shaping the country’s economic stability and investor confidence. With key IMF-backed incentives in place, Pakistan now faces the challenge of ensuring a transparent and competitive bidding process to achieve the best possible outcomes for its struggling assets.
