ISLAMABAD: Pakistan could expect much higher foreign exchange proceeds from the sale of the Roosevelt Hotel an upscale property in New York`s Manhattan district with an improved mix-use sell-off transaction proposed by US advisers.

But pre-qualified bidders for Pakistan International Airlines (PIA) have expressed concerns over the European Union`s ban on Pakistani airlines, which could affect the bid price for the national flag carrier that is currently up for sale.

This was the crux of a news briefing on Wednesday, led by Privatisation Minister Abdul Aleem Khan and federal secretaries of the privatisation divisionand privatisation commission, Jawad Paul and Usman Bajwa, respectively.

Mr Bajwa said that Jones Lang LaSalle Incorporated (JLL) a Chicago-based global real estate services firm hired to advise on the privatisation structure had submitted a comprehensive due diligence report to the government and proposed three options.

The report suggested thatnoor area ratio (FAR) of the building currently stood at 1:15 (650,000 sq. feet retail area) which could be doubled to 1:30 (about 1.3 million sq. feet), thus increasing the retail sellable area, with support from the metropolitan authorities and se condary market.

`The increase in Roosevelt`s FAR provides a difference of a few billion dollars,` chipped in minister Aleem Khan who saidthat real estate was one area he could claim significant personal expertise, unlike other entities on the the privatisation list. He said he was not talking about a few billion dollars as the total value of Roosevelt but the additional value because of the higher floor area ratio a term used for the covered area for construction.

`I may not be as expert as the expert advisers (JLL) but I would be personally responsible for even a loss of a single rupee in the Roosevelt transaction against its true potential and best value, said the minister who himself operates one of the leading real estate businesses in at least three major cities, including Islamabad.

The cabinet had approved a joint venture option with international investors for mix-use development.

`We now have to tell them what are the transaction options` for which the report would be taken up with the federal cabinet, said Mr Bajwa, explaining that these could include an outright sale, long-term lease, or joint venture operations depending on all the pros and cons, including but not limited to maximum proceeds over a period of time.

Mr Bajwa said the privatisation commission would take up the JLL`s report to the Cabinet Committee on Privatisation (CCoP) for a decision and was targeting to invite expressions of interest (EOIs) by the first week of August. `We are ready to go to CCoP,` he said.

PIA bids Talking about the PIA`s privatisation, Mr Bajwa said the six pre-qualified bidders Air Blue, Lucky Group, Arif Habib Group, Blue World, Pak Ethanol, and FlyJinnah were currently conducting due diligence on the PIA`s data and confirmed that they also had concerns over European Union Aviation Safety Agency(EUASA)banonPakistani airlines that also applied to PIA.

He said the PIA management had informed the bidders and the government as well that the airline had been cleared by the EUASA but the ban could not be lifted because of regulatory functions that pertained to certain things with Civil Aviation Authority (CA A) and their standard operating procedures (SOPs), currently going through restructuring. Mr Bajwa said all the bidders would be provided comprehensive due diligence by CAA as well to addressthose concerns.

The minister deplored that a former cabinet member had said adverse things about Pakistani pilots despite the fact that Pakistani pilots were among the best in the world. `There may be issues with safety and security of planes but this would improve once new investors take over and airports are also privatised` for which the sale process was underway. He said the PIA had among the best international routes and spots. These are the biggest assets that would make the airline profitable the day it is in private hands.

`Hopefully, bidders concerns would be resolved indue course` and would not impact the bids.

Mr Khan said the PIA hotels` proceeds had been separated from the core PIA whose Rs630bn debt would be paid off over a period of 10 years under an easy payment plan with banks. The hotel proceeds would finance these PIA debts.

Mr Bajwa explained that PIA bidders would complete their due diligence in a week and the timeline for bidding would be set within 10 days in consultation with bidders. He said the level of detail bidders and their experts had gone into and questions raised showed very serious interest. `We expect very healthy competition,` he said.

The minister added that the cabinet had authorised divestment of 51-100pc shares and it would be decided within a few days in consultation with bidders how much shareholding should be actually offered for bidding.

`We would like to keep shareholding in PIA for a better dividend or subsequent improved return but this would be based on finances the government could also spare for fresh investment in line with private investment,` the minister said, adding that all bidders would bid for the same size of shareholding and processes would be made transparent.

The minister said the nation was fully convinced with the privatisation programme under which 24 entities were on the active sale list, spanning five years. He lamented thatformer chief justice Iftikhar Muhammad Chaudhry had caused irreparable loss, not only to privatisation but also to the country`s economic interests. He should come forward and tender a public apology and his assets should be sold and pay atleast a fraction of the national loss.

He pretended as saviour of the nation and destroyed Pakistan Steel, PIA, and Reko Diq with billions of dollars of loss.

`We paid more than Rs500bn to PIA since and $6bn additional cost forReko Dig along with national integrity. Today, PIA losses stand at Rs830bn,` he said, adding that all the stakeholders of the country contributed to these national losses over the years with no exception, including all the political parties.