ECC rejects Roosevelt's $17.6m bailout | The Express Tribune
Key Takeaways
- The ECC did not approve the $17.6 million bailout request for the Roosevelt Hotel, New York, asking the Ministry of Defence to reconfirm financial estimates.
- The Privatisation Commission is delaying a decision on a proposal to reopen the closed Roosevelt Hotel, which was submitted three months ago.
- The hotel faces an arbitration risk from its union due to management's failure to make timely business decisions regarding its status.
- The closure of the Roosevelt Hotel carries potential liabilities of $131 million over three years, while reopening requires $61 million for refurbishment.
- The ECC also approved Rs4 billion for compensating residents whose land was acquired for the Defence Complex in Islamabad.
The Economic Coordination Committee (ECC) of the Cabinet, led by Finance Minister Senator Muhammad Aurangzeb, declined to approve a $17.6 million bailout requested by the Ministry of Defence for the Roosevelt Hotel, New York, to cover liabilities after its lease termination.
The ECC directed the ministry to reconfirm its financial estimates and resubmit the matter, noting previous smaller bailout requests were also unapproved due to concerns over actual requirements.
This governmental indecision, coupled with management failures, has placed the hotel at risk of an arbitration award following a case filed by the hotel union after the facility was closed in June.
Reopening the hotel, which is part of the government's privatization program, would still require $61 million for refurbishment, while settling all liabilities over three years is estimated to cost $131 million.
Meanwhile, a three-month-old proposal from PIAIL to reopen the hotel remains pending with the Privatisation Commission, which insists that PIAIL's financial numbers need to be more realistic.
In separate decisions, the ECC approved Rs4 billion for compensating residents whose land was acquired for the Defence Complex in Islamabad.
