SBP flags delay in Roosevelt loan | The Express Tribune

ISLAMABAD:

The State Bank of Pakistan (SBP) has expressed serious concern over the delay in the repayment of National Bank of Pakistan (NBP) loan relating to the Roosevelt Hotel.

The central bank showed concern during discussions relating to the financial challenges facing the Roosevelt Hotel after the termination of a lease agreement with the New York City.

During deliberations in a recent meeting of the Economic Coordination Committee (ECC), the reasons for seeking financial support amounting to $17.6 million were explained.

It was informed that the liabilities included union liabilities, real estate taxes, insurance claims, interest to be paid to the NBP, administrative and general costs, utility payments, etc.

However, the adviser to the prime minister on privatisation pointed out that the payment of liabilities could be managed in phases if properly planned. The ECC also noted that Pakistan International Airlines Investment Limited (PIAIL) had not made any progress on converting the NBP’s foreign exchange loan into a rupee loan, as should have been done.

The Finance Division mentioned that the financial statements that had been shared with the division were related to the Roosevelt Hotel and PIA Holding Company Limited, not pertaining to PIAIL, which were still pending.

The Finance Division said that there was still not sufficient clarity on the demand of the Defence Division made in para 8(a) of the summary, which needed to be further scrutinised. The State Bank also showed concern over the delay in repayment of the NBP loan.

The ECC, while expressing its concern over the delayed submission of the case, directed the ministry to reassess the financial proposal within a week, rationalise the financial requirements down to the bare minimum level in consultation with the Finance Division, NBP, State Bank and Privatisation Commission, and submit a revised proposal, after obtaining approval of the PIAIL board.

It also directed that PIAIL shall submit its latest audited reports and financial statements to the Finance Division.

Roosevelt Hotel was reopened post-Covid-19 with the approval of the ECC in May 2023 by entering into the Migrant Business Arrangement with the New York City under which the hotel was leased out for three years with a guaranteed period of 18 months.

However, after the change of government in the US, the New York City terminated the Migrant Business Arrangement with the Roosevelt Hotel with effect from June 30, 2025.

PIAIL had said that during the Migrant Business Arrangement with the New York City, Roosevelt Hotel had earned $166 million from May to June 2025, and taking into account the $169 million to clear the outstanding liabilities, carrying cost and operating expenses, there was a shortfall of $3.54 million, which would be met by utilising the $3.5 million available with PIAIL.

It was shared that PIAIL had further said that after the termination of the lease agreement on June 30, 2025, there would be no revenue stream from the Roosevelt Hotel to pay the outstanding liabilities, carrying costs of $28.6 million from July to December 2025.

In respect of the Roosevelt Hotel, the Finance Division asked the concerned ministry to share the financial report of PIAIL, and cash inflow from the potential management contract with High Gate Capital.

The concerned ministry had submitted proposals for the approval of the ECC, which included the provision of financial support amounting to $17.6 million for meeting the outstanding liabilities and carrying cost of PIAIL for six months from July to December 2025.