Federal Cabinet has given the nod to a summary for giving national flag carrier owned Hotel Roosevelt located in New York’s Manhattan on long term lease, well-placed sources in PIA confided to ‘Pakistan Observer’ on Wednesday.
The National Assembly Standing Committee on Privatization was recently informed in its meeting by a consultant hired for privatization, sources added. They said that when the Committee Chairman MNA Syed Mustafa Mahmud wanted to question PIAL MD and its Director Finance he was told that they could not come because they were busy travelling overseas and hence could not participate in scheduled standing committee meeting. Nobody is aware about terms and conditions of this long term lease which according to informed sources also includes option to purchase etc, although PIAL is totally owned by Government of Pakistan, who has spent over $290 Million in the interim period on its renovation etc.
Privatization Minister Muhammad Mian Soomro told the committee that unlike the impression given by PIAL management the fact is that hotel was not making profits for past few years. This revelation is surprising because regular bonuses have been given to top executives of this company going in a loss. After the Supreme Court judgment on appointment of AM Arshad Malik, PIA does not have an MD. On February 4, 2020, a former PIA MD, an octogenarian and a US national, who is almost 80 years old and has distinction of having served for shortest period from February 2008 to May 2008 was nominated as member PIA Board of Directors. What was surprising that within a month on 9 March this year, he has been appointed as Chairman PIA Board. Legal experts are of the opinion that this is a stop gap arrangement to prevent case proceedings in SCP. The present MD of PIAL, also a US national, already has had more than for three consecutive extensions in his contract and is over 73 years old.
After PIA has been declared public limited company under Companies Act, such powers vest solely with BOD following a proper procedure, which includes agenda circulation to all members, yet in this case Federal Cabinet announced the approval of Aslam R Khan as Chairman PIA and notification was subsequently issued by Secretary Board dated March 9, 2020 without any brief or bio data etc of the nominee. Aslam R Khan was born before WW2 and in 1981 his services were terminated under MLR52. He was however reinstated in 1990 when PPP government led by BB decided to reinstate all those who were dismissed summarily, because most of them were involved in trade union activities, except few others including Aslam R Khan who was serving in marketing.
PIA Investment is a 100% Government of Pakistan owned entity with head office located in Karachi while it is registered in British Virgin Isles as an off-shore company. Unlike other state-owned companies PIA Investment has never held its Board meeting in Pakistan, nor has its finances ever been subjected to scrutiny by Auditor General of Pakistan.
For quite sometimes, various lobbies have been active trying to sell PIAL Hotel Roosevelt and Hotel Scribe located in Paris, which are assets worth over $1.8 to 2 Billion. If such a transaction is indeed carried out with transparency, it can fetch approximately $1.6 Billion after local taxes deduction etc.
During Nur Khan’s tenure PIA owned Hotel Midway and Hotel in Karachi, Sambara Inn in Larkana, Inter-Pak Inn in Sukkur, and what was once Swat’s palace in Saidu Sharif, where now Hotel Serena exists and other properties in Hunza etc. It is also to the credit of Nur Khan’s vision that PIAL purchased Hotel Scribe in Paris, Minhal in Riyadh and another property in Abu Dhabi. Unfortunately within six months of takeover by Zia junta, Nur Khan resigned because of interference by the dictator. From thereon PIA has been in a continuous downslide, with financial and administrative indiscipline on the rise and human resources depleted by nepotism and cronyism by every successive civil or uniformed governments.
Hotel Roosevelt located at a prime location in midtown Manhattan adjacent to Grand Central Station has a market value estimated to be over US$1 Billion. It has over 1,015 including 52 suites. In 1978 PIA Investment, AM Nur Khan in partnership with a Saudi Prince Feisal signed a deal with Millstein Brothers owners of Hotel Roosevelt for 20-year long lease with option to purchase at a fixed price of US$36.5 Billion.
This deal was witnessed by PIA Director Finance Azfar Hasnain and Haseeb Hassan. AM Nur Khan resigned when Zia took over and in 1999 after 20 year period, PIA decided to exercise option to purchase. The MD PIA Investment Aslam R Khan agreed to a higher price which was almost double the fixed price. PIA went to court in New York for breach of agreement and airline finally won the case in 2000 after two witnesses Azfar and Haseeb produced documentary evidence.