ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Wednesday approved execution of a settlement agreement with the hotel union and New York City for PIA’s Roosevelt Hotel.
The ECC also approved a supplementary grant for payment of court cases for the dispute with India under the Indus Basin Treaty. The ECC was informed that the summary was moved, seeking its approval for utilisation of 1,025 rooms. A committee was constituted to negotiate with the union and the New York City to reach a settlement.
The committee constituted by the ECC proceeded to New York for negotiations without waiting for the minutes of the meeting. PIA-IL has now informed the government that the committee has concluded its negotiations with the union and the city.
It has also informed that the results of the negotiations were placed before the PIA-IL Board of Directors and after concurring with the position brought out by the committee resolved that the matter may be placed before the ECC of the Cabinet for seeking its approval and execution of the proposed settlement agreement with the union and contract with the city besides withdrawal of pending lawsuits between the hotel, union and the city after making a full disclosure.
The ECC granted its approval and execution of settlement agreement with the union and city immigrant business contract, in consideration of expected financial projections of immigrants’ business and attached risks; withdrawal of pending lawsuits by the hotel with the union and City of New York with pursuant to the terms of settlement agreement with the union; in case the city decides to terminate the contract after 18 months, the unpaid liabilities of the union (approx. amount $28m) shall be paid by the government.
The ECC may direct the NBP to implement its decision dated Dec 31, 2021 with regard to rollover of $142 million loan along with markup for a further period of 2 years till December 31, 2024. Now that there is a viable business plan, the hotel will be able to service the debt.
Similarly, the ECC may also direct the NBP to waive compliance of the covenant(s) of $142 million loan between the hotel and NBP pertaining to lock box/escrowing of funds by NBP for interest, real estate tax and insurance till December 31, 2024, enabling RHC to manage its cash flows in terms of payment to union, and other hotel’s expenses and liabilities; and in order to avoid any potential default vis-à-vis weekly payments to the union due to any reason; the government is requested to extend a funding of approx $5 million to $10 million to RHC/PIA-IL respectively.
The ECC also approved following Technical Supplementary Grants/Supplementary Grants: i. Rs153 million in favour of Ministry of Water Resources for payment of court cases fee for the settlement of dispute with India under the Indus Waters Treaty.
ii. Rs4 billion (Equivalent to $20 million) as rupee cover in favour of Ministry of Federal Education
and Professional Training for the World Bank Programme “Actions to Strengthen performance for inclusive and responsive education.”
