LAHORE, June 4: 4B Marketing, which made the highest bid of Rs1.21 billion for Faletti's Hotel at the property's auction by the Privatization Commission on May 29 , plans to build a five-star hotel costing around Rs15 billion in place of the present structure of the city's oldest and most famous hotel.

According to Jawed Salim Qureshi, Chief Executive of 4B Marketing (4BM), the project would be a joint venture for which negotiations were under way with four multinational organizations that are considered giants in the hotel industry of the world. However, he did not identify the organizations.

He told Dawn that the plan was to build a hotel that conformed to the highest international standards and offered entertainment facilities that had not been introduced in Pakistan so far; plans include a 'Disney Land'.

There would also be a Tea House to serve the intellectuals of the city who had lost their traditional meeting places in the last few years. The hotel would preserve the rooms of Quaid-e-Azam and Justice A R Cornelius, he said and be in line with the traditions of the city.

Asked how 4BM made a bid that turned out to be Rs35 million higher than the next offer, Salim Qureshi said that "we worked out that figure by evaluating the cost of the property and the general rates of commercial property in Lahore."

He pointed out that even in some areas on the periphery of the city, commercial land was being sold at around Rs15 million while it had shot up to Rs30 to 40 million in centrally located areas.

"We felt that Faletti's, located as it is in the heart of Lahore, was worth at least this much. The offer was based on our study of the cost of commercial land in Lahore," he said.

He described Faletti's as 'ideally located between the old and new Lahore surrounded by all the major landmarks and historical and cultural were at a short distance. It is a point where old and new traditions and trends of the city converge."

An engineer by profession, Salim Qureshi spent the first about ten years of his career with an engineering firm (NESPAK) and shifted to his family's garment's business by the end of eighties. A slump in the garment's sector forced him to look around for new avenues.

He felt that a 'vacuum existed in the agriculture sector and got in pesticides business. Besides being CE of 4B Marketing, he is also the Marketing Director of Ai Akbar Group (AAG) that is currently Pakistan's top company dealing in pesticides.

It was established in 1992 but, he said, its main success had been during the last four years with the government's focus on the agriculture sector. Asked if pesticides business had flourished to the extent of enabling some of its partners to make a bid close to one a quarter million rupees, he laughed and said that the a consortium of banks is backing the bid.

AAG has stake in 4BM that is a newly established company. Faletti's is to be its first venture. He did not deny that AAG had done well but emphasized that it had succeeded by filling a vacuum and by giving consumers, in this case the farmers, a fair and equitable deal.

For instance, some of the pesticides marketed by other companies at Rs5,600 per litre had been sold by AAG at Rs1,000 for the same quantity and its cost was being further reduced to Rs700 per litre.

Qureshi was confident of negotiations with one of the companies finalizing in the next 10 to 15 days; the joint venture partner would replace the consortium then, he said.

He said that the profile of 4B Marketing had received positive response from all the organizations it was sent to and interpreted their attitude as trust in Pakistan and stability of the country's economic and political system in the international market.

He said that even otherwise, conditions for investment in Pakistan had become extremely favourable with the mark up scuttled from 18 per cent to 24 per cent to about four per cent and transparency established in handling all kinds of projects.

Qureshi also pointed out that Pakistan's currency had remained stable and cited the strength it had gained against dollars in the last few years, the exchange rate sliding from Rs68 to a US dollar to around Rs58.

He was also of the view that the government's policies and its stand on various international issues had boosted the confidence of foreign investors in Pakistan being 'great opportunity' for investment. This, according to him, was one of the reasons why the queries of 4B Marketing had been well received by multi-national organizations in the hotel industry.

Pressed to further explain the high bid he said that the time available for response at such auction was extremely limited. 'Our company expected a maximum bid of an amount between Rs80 to 90 million.

Raising that significantly meant consultations between the representative of bidders and partners. As the difference was significant, other bidders came under pressure and this factor proved vital in our favour because the runners up withdrew after our offer," he said.

Asked if the price of Rs1.21 billion wasn't on the higher side, Qureshi said that there wasn't a single chunk of land of this size anywhere in the main parts of Lahore which made the property invaluable.

Qureshi said that the 4B's interest in Faletti's developed after the cricket match between Pakistan and India. "It was an eye-opener in the context of Lahore's potential for tourist activities in the wake of better relations between the two countries," he said.