No wonder, then, that the Pakistani government’s Privatization Commission has often discussed selling the hotel—making as many as 15 contradictory decisions over the years, according to one Pakistani news outlet—as a way to raise funds for the foundering airline.
This past summer, the Pakistani government enlisted New York-based banking giant Citigroup and New York-based real estate firm Cushman & Wakefield to act as financial advisers on a possible sale.
Various reports have placed the recommended price tag anywhere from $400 million to upward of $1 billion.
A source close to the advisory group told The Observer that virtually anything could be done on the site. (The old hotel isn’t landmarked or anything.) It could remain a hotel. Or it could be converted into offices. It could also slowly evolve into an array of uses—part-condo, part-hotel, part-retail.
But, so far, nothing has changed. The property hasn’t even made it to market.
The issue has become a political football back in Pakistan, marred by allegations of cronyism. Pakistani Prime Minister Shaukat Aziz, it turns out, used to work for Citigroup.
And there are financial considerations as well. Selling the property made a lot of sense when the hotel wasn’t making money; not so much now that the lodge has become the most lucrative part of the state-sponsored airline’s otherwise unremarkable portfolio.
According to multiple reports in Pakistani newspapers, the hotel is expected to generate profits in excess of $7.5 million this year, and future estimates predict that sum increasing to about $22 million annually over the next decade.
This past September, airline boss Zaffar Khan himself traveled to New York to check out the hotel operation firsthand. When he got back, he urged the government not to rush it to market, noting that the hotel had improved dramatically since the renovations.
Love the duvets!
In recent weeks, the political situation in Pakistan has only intensified, with frequent hotel guest President Musharraf at one point declaring martial law. The controversial sale, needless to say, has slipped considerably down the country’s list of legislative priorities.
“You’re dealing with a crazy part of the world,” a source close to the advisory group told The Observer. “This could go on for years and years.”