Islamabad, March 11, 2025: The Pakistani government has assured the International Monetary Fund (IMF) that the privatization of Pakistan International Airlines (PIA) will be completed by July 2025, but the fate of Roosevelt Hotel in New York remains undecided, especially after the U.S. government’s decision to terminate a $228 million lease deal one year early.
During a briefing on Pakistan’s stalled privatization program, authorities informed the IMF that they plan to privatize five to seven state-owned enterprises (SOEs), including PIA, three financial institutions, and three power distribution companies.
The Cabinet Committee on Privatization (CCOP) is yet to determine whether Roosevelt Hotel—one of Pakistan’s most valuable overseas assets—will be sold outright or leased under a joint agreement. The 1,025-room hotel, located in one of New York’s most expensive areas, was leased in July 2023 to the Immigrant Housing Business under the New York City Government.
However, the New York authorities have issued a notice to terminate the lease in July 2025, a year earlier than planned. This premature termination is expected to cause an $80 million revenue loss, as the city was paying $210 per room per night for the third year.
The CCOP had earlier expressed concerns that U.S. immigration policies under President Donald Trump could impact the three-year lease deal. The government is now exploring alternative business options for Roosevelt Hotel, but despite hiring multiple financial advisors, no final decision has been made.
In 2023, the government appointed Jones Lang LaSalle Americas as a financial advisor for Roosevelt’s privatization at a cost of Rs2.1 billion, including a 0.95% success fee on the sale proceeds. A special committee, headed by Petroleum Minister Ali Pervaiz Malik, has recommended selling the hotel through open bidding after Saudi Arabia declined to show formal interest in purchasing it.
The government has reaffirmed to the IMF that it is committed to selling PIA by July 2025, following a previous failed privatization attempt. The first effort collapsed after a weak screening process led to a real estate developer emerging as the sole bidder, offering only Rs10 billion—far below the Rs85 billion minimum asking price.
Authorities are now testing market sentiment before inviting fresh bids by the end of March. While three potential bidders have expressed interest, two previously withdrew over disputes related to an 18% sales tax on aircraft leases and Rs45 billion in PIA liabilities. The IMF has since agreed to waive these conditions, alongside reopening European flight routes, making the second bidding round more attractive.
The government also informed the IMF of plans to sell three power distribution companies (DISCOs) in Faisalabad, Islamabad, and Gujranwala by December 2025. However, authorities are still evaluating whether to privatize them separately or in a single transaction.
The IMF inquired about commercial debts linked to these DISCOs, but the government has no immediate plans to sell any power generation companies this year.
Among the financial institutions set for privatization:
- Zarai Taraqiati Bank Limited (ZTBL) is expected to be sold by November 2025. The government is in the process of hiring a financial advisor for this transaction.
- House Building Finance Company is slated for sale next month, though previous deadlines have repeatedly been missed.
- First Women Bank Limited has drawn interest from the United Arab Emirates, which prefers a government-to-government deal rather than open bidding. The sale is expected to conclude by May 2025.
The IMF has been pressing Pakistan to accelerate its privatization program to reduce fiscal deficits and improve economic stability. However, the government remains cautious, seeking market confidence and investor interest before proceeding with high-stakes sales of loss-making enterprises.
