Aviation Division raises questions over role of PC, others


ISLAMABAD: The Aviation Division has reportedly raised serious concerns on the role of Privatisation Commission (PC), Financial Advisors and Roosevelt Task Force (RTF), on privatisations of New York-based Roosevelt Hotel of PIA, well-informed sources in Aviation Division told Business Recorder.

Prime Minister’s Special Assistant on Overseas Pakistanis and close friend Sayed Zulfiqar Abbas Bukhari is also a member of RTF. On June 8, 2020, Prime Minister directed the Aviation Division to submit its proposal on a joint venture/long-term lease of Roosevelt Hotel before the CCoP.

The sources said that on a summary titled “request for privatisation of PIA-Investment Limited (PIA-IL) owned assets” moved by the Ministry of Privatisation on November 14, 2019, the Cabinet Committee on Privatisation on November 15, 2019 constituted a taskforce under the chairmanship of Minister for Privatisation, comprising Overseas Pakistanis, Secretary Aviation, Secretary Privatisation, Secretary Finance, CEO PIACL and Legal and Financial Consultants of Roosevelt Hotel for framing Terms of Reference (ToRs) for leasing the Roosevelt’s site for setting up of a joint venture project.

Aviation Division had said during the meeting of CCoP that they had not been consulted in the matter. The federal cabinet on December 3, 2019 ratified the decision of the CCoP with the direction that MD, PIA-IL shall be included in the taskforce.

Few meetings of the taskforce were held in the Ministry of Privatisation in December, 2019. Subsequently, Ministry of Privatisation forwarded a draft summary for CCoP to Aviation Division on December 18, 2019 for inputs/views/comments.

The summary also contained proposed ToRs for the Roosevelt taskforce. Aviation Division gave its comments on December 24, 2019 raising some fundamental questions on the scope assigned to the Financial Advisor, role of Privatisation Commission under the relevant law, legal basis for constitution of taskforce and the proposed ToRs of the taskforce which are basically the functions of the Privatisation Commission.

Aviation Division, in its comments said that the scope assigned to the Financial Advisor may be expanded to include the best options for a joint venture including profit sharing mechanism, management & control, exit strategy etc.

According to the functions laid down in section-5 of the Privatisation Commission Ordinance, 2000, the entire privatisation process starting from privatisation guidelines to the final recommendations for privatisation of organisations/ entities in public sector for final approval of the federal government is the responsibility of Privatisation Commission. CCoP also has an oversight on the privatisation process.

Provision of constitution of taskforce is not provided in the Privatisation Commission Ordinance, 2000 and such constitution may lead to legal implications in future. Proposed ToRs of taskforce are basically the functions and powers of the Privatisation Commission as mentioned in para-5 of the Privatisation Ordinance, 2000 which may not be transferable or delegated to any committee/taskforce without making amendments in the relevant law.

Further, the issue of early disposal of Roosevelt Hotel has also been raised before the Prime Minister on several occasions. In the meeting chaired by the Prime Minister on restructuring of PIACL held on June 8, 2020, it was directed that Aviation Division must submit/present its proposal for JV/ long -term lease of Roosevelt Hotel before the CCoP for its consideration within one week. It was also directed that a special meeting (one-point agenda) of CCoP shall be held, at the earliest to consider Aviation Division’s proposal.

The Prime Minister, in another meeting held on June 19, 2020 directed that as part of PIA’s financial restructuring plan, Aviation Division, in consultation with Privatisation Division, submit/ present its proposal, for revision of constitution of Task Force for privatisation of Roosevelt Hotel, owned by PIA-IL before the CCoP to review its decision of November 15, 2019 duly ratified by Cabinet on December 3, 2019 whereby the said Task Force was constituted on December 13, 2019.

Privatisation Commission (PC) is of the view that the composition of RTF can be amended by the CCoP. RTF will only make recommendations to the CCoP.

PC further stated that it scheduled a meeting on April 29, 2020 to discuss the concerns of Aviation Division, which, however, requested to postpone as Secretary Privatisation Commission required the participation of its legal and technical team. In response to which PC arranged the meeting on May 7, 2020. However, Aviation Division again requested for rescheduling of meeting as their experts reside in other cities and require at least three days of notice.

Later on, another meeting scheduled by Privatisation Commission on May 13, 2020, however, Aviation Division in its letter of May 11, 2020 stated that Minister for Aviation has already requested Chairman PIA-IL to brief him over the privatisation of Roosevelt Hotel and to answer certain queries. The Aviation Division requested PC to postpone the meeting. Accordingly, it was postponed till further notice.

“The position clearly exhibits that PC has extended its full cooperation and made all-out efforts to address the Aviation Division’s concerns and to bring all stakeholders to a consensus so that the matter may be placed before the CCoP at the earliest,” said, Ejaz Rasool, Director Administration PC.

The issue will be discussed in the forthcoming special meeting of CCoP on the future of Roosevelt Hotel which has already triggered a controversy.