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Lahore: Pakistan has leased its iconic Roosevelt Hotel in New York to the New York City Administration for three years, the cash-strapped government has announced, in a deal that will enable the country to earn up to USD 220 million. The Roosevelt Hotel, named after former US President Theodore Roosevelt, has been a prominent landmark in Manhattan, New York since 1924.
State-run Pakistan International Airlines (PIA) leased this prime asset in 1979 and eventually bought it two decades later. Under the contract, the New York City Administration will work for three years, providing residential facilities to the migrants. “The lease agreement is expected to generate revenue of about USD 220 million for the Government of Pakistan,” Minister of Railways and Aviation Khawaja Saad Rafiq announced during a press conference here on Monday.
“A contract was signed for 1,250 rooms. The hotel will be returned to the Pakistan government after the three-year lease expires,” Geo TV quoted him as saying. The hotel was closed during the pandemic in 2020, only to reopen earlier this year to house expatriates. The minister said the annual expenditure of the hotel was USD 25 million, of which current liabilities amounted to USD 20 million.
Leasing the Roosevelt Hotel is part of the Pakistan government’s larger plans to revive the country’s creaking economy. Cash-strapped Pakistan and the IMF have failed to reach a staff-level agreement on a US$1.1 billion bailout package aimed at saving the country from bankruptcy.
The funds are part of a US$6.5 billion bailout package approved by the IMF in 2019, which analysts say is vital if Pakistan is to avoid defaulting on external debt obligations. Pakistan is currently battling a major economic crisis, with high foreign debt, a weak local currency and dwindling foreign exchange reserves, barely enough for a month’s imports.
Pakistan’s inflation level shot up to 36.4 percent in April mainly driven by food prices. This is the highest in South Asia, according to the country’s statistics bureau, and was up from 35.4 percent in March.
