public private partnership ppp TCKP.docx.docx

STATUS REPORT OF THE FEASIBILITIES/PC-Is

a.Prologue:The Sarhad Tourism Corporation unlike its sister corporation commenced its activities in 1991 primarily focusing on awareness raising. The corporation simultaneously after deliberations in the 1st three Bods meeting embarked upon detail planning exercises. The outcome of the planning exercise materialized in the form of PC-II and ToRs for master, Regional and Area Specific PC-Is/Feasibilities. Subsequently the ADPs of 93-94-95 provided grant in aid for these studies after observing all the codal formalities such as concept papers approval by the competent forms i.e. DSC/PDWP/DCSC/PCSB. However after the nation wide advertising in May 95 the award of these feasibilities came late in early 96. in Mid 96 work plan and composition of teams from consultants selected were called upon ending on signing of Agreements.

b.Over all goals:The notion behind commissioning these feasibilities studies (and if any future studies to be conducted), is to develop a via media wherein the participation of the people, private sector in collaboration with public sector is ensured for making tourism an income generating venture. the tourism sector enables and country to skip the industrialization phase and directly additional income is ensured thereby increasing the GDP. tourism may not be only rest and recreation but it can be a first hand knowledge culture heritage, ecosystem preservation as well as natural geography the feasibilities under completion have been modelled on the outlines accepted internationally for developing an economy. In the context of NWFP the reports drafted by the consultants have touched upon ancient civilizations, traditional handicrafts, diverse ethnic cultures and of course the scenic beauty. The snow covered peaks, the lush green forests and dry barren mountains all have been taken into account. Even village level guest houses, roadside facilities, motels, hotels, hospitals post offices, rail road, air as well as water ways have been taken into account. the need for training and trained tourist guides has also been addressed. Water sports trophy hunting, skiing, camping, hiking, trekking and mountaineering besides traditional games have also been included in the reports. The overall strategy is three pronged for tourism development starting for short term measures expanding into medium term measures that are consolidated in long term measures. The overall goal is certainly to alleviate poverty by harnessing the people potential through different tourism related entrepreneurial activities in a traditional Pakistani culture and environment.

c.Agreements/Contracts:As a matte of policy the standard agreement format of the PE&D development was adopted with slight modifications. The modification was both the incorporation of the terms of reference into the scope of work together with the time frame and other minuets details. All the agreements executed with the consultants were probably as innovation from the past practice wherein ToRs used to be separate annexure of the contracts. All the agreements provided for the clause that not only the feasibilities/PC-Is would be Completed but also private sector financing would also be identified that is to say if the same PC-Is are implemented by government or private sector as a joint collaboration what would be scenarios. These agreements further bounded the consultants to not only consult the public sector but also the private sector and respective communities directly to be affected or effected with a special emphasis on the environmental impact Assessments.

d.Time Frame: The Area specific studies were to be completed in four months time while Regional and Master studies in six month time. however when the consultants began their work they were frustrated and non of the consultants were able to abide by the time. There fore the corporation in public interest tookup the matter with PE&D department wherein it was decided in principle that the feasibilities/PC-Is would be sent to them for final approved by the present Managing Director. Subsequently the consultants were taken into confidence and the work continued albeit it is moving rather very slowly.

e.Financial Phasing:Unlike other feasibilities the corporation bifurcated the amount of the total cost approved for each study into five instalment each of 20%. the final payment of 20% was made conditional to three months periods after the acceptance of the project documents by Government of NWFP in the PE&D Department. In almost all the feasibilities except for three area specific studies wherein draft PC-Is have been received payments have made upto 40% of the total cost. In the due course of time the financial situation of the ADP shrunk form millions to almost zero allocation in the FY 96-97. The financial Crunch also hampered the pace of completion of the studies and even today an amount of Rs. 1.5 million out of a total of Rs. 2.2 million is pending release by Finance Department.

f.Workshops and circulation of studies:The corporation arranged a prelimenary work shop on 14&15 September 1996 in order to involve the stake holders that is public sector, private sector, public representatives, individuals, press media and communities to give their feed back on the quality of worked competed till mid Sep'96. Since Sep'96 the workshop report had been circulated to all the commissioners, participants of the workshop as well as the consultants for feed back. Similarly the revised reposts received in late 96 or early 97 were dispatched t the district administrations of the respective localities where the studies were being under taken to their feed back. Except the district administration Mansehra no single comments have been received despite remainders. Thus it is under consideration of the corporation to inform all the consultants to go ahead with their studies in order to submit the same to PE&D department for final approval or observations if any. In the mean while STC will proceed with releasing one instalment each to the concerned consultants in order to give them a positive signal but subject to release of Rs. 1.5 million of funds by the PE&D Department. Reminders would also be sent to the district administration concerned for expediting their comments with a deadline otherwise it will demand that they do not have any reservations.

g.Epilogue:There are in total 8 area specific, 2 regional and one master one Master feasibility study. In two area specific feasibilities PC-Is have also been received. In other two area specific feasibilities the detail feasibilities have been received while leaving yet another one feasibility the remaining 3 area specific feasibilities out of the eight revisions alongwith detail designing is required in general the feasibilities of regional plans are satisfactory but lacking designs for facilities. While the Master plan needs more elaborate details even it has to be a very lose umbrella project document of the all the other studies giving more elaborate details not touched buy the remaining studies especially for the southern parts of the province including plans of Peshawar and Mardan division.

The detailed table giving detail of each case is clearly visible from the table it is imperative for the promotion of sustainable environment friendly tourism development that some of area specific plans are taken up by the public sector in order to give a demonstrative effect. Subsequently private sector will come up for financing of the other area specific regional and master plans. It is also proposed to firm up private sector loans from international financing institutions by engaging international financial advisory firm as already indicated by STC in its private public partnership proposal annexed to this status report.

The Prime Minister directive on provincial tourist police as well as tourism authority also needs to be part of the provincial, master plan. Also the directive of CM, NWFP, NA committee on tourism and provincial committee No.17 have to be appropriately adjusted in the tourism plans which have partially addressed these issues.

S.NoName of feasibilityApproved CostAmount paidAmount outstandingStatus of feasibility

1Master Plan for Tourism development in NWFP 650,000260,000390,000Draft Final Report Submitted to STC

2Regional Master Plan for the Promotion & Development of Tourism in Hazara Division 452,000180,800271,200

do

3Regional Master Plan for the Promotion & Dev. Of Tourism in Malakand Division 452,000180,800271,200

do

4Chairlift Scheme Galyat 450,000180,000270,000

do

5National Park & Tourism Facilities at Mahudand Swat328,000196,800131,200Draft Report+PC-I submitted to STC

6Additional Facilities at Tourism Complex Kund214,000128,40085,600Draft Report+PC-Isubmitted to STC

7Recreation Theme Park at Tanda Dam, Kohat162,00064,80097,200Draft Final Report Submitted to STC

8Trekking and Camping in Galyat and Kaghan315,800189,480126,320

do

9Rest & Recreation Park at Lake Saiful Maluk280,000112,000168,000

do

10Extension of Miandam Hill Resort350,000140,000210,000

do

11Acquisition of Land Adjacent to Kabal Golf Course300,000120,000180,000

do

Grand Total3,953,8001,753,0802,200,720

PROPOSAL FOR PRIVATE SECTOR PARTICIPATION IN TOURISM PROJECTS OF THE SARHAD TOURISM CORPORATION

OVERVIEW: --------

The Sarhad Tourism Corporation was primarily formed for the promotion of sustainable tourism development in the form of an industry due to the natural and scenic resources of the province. The Sarhad Tourism Corporation had floated 12 Nos. of feasibility studies for the development of environmental friendly tourism industry at the provincial, regional, local and village level. The Master plan, Regional plan and Area specific local plan are the different feasibility studies being carried out for the drawing up the attention of the private sector the potential investor and the govt. of NWFP itself for appropriate funding.

IDENTIFICATION OF THE AREAS FOR INVESTMENT BY STC.-------------------------------------------------

STC with grant from Govt. of NWFP and International donors is poised to develop the existing properties at various stages of a process that is suppose to result into the ultimate transfer those properties to the corporation. The second areas those can be associated with Govt. of NWFP are area specific plan.

IDENTIFICATION OF THE AREAS FOR INVESTMENT BY PRIVATE SECTOR.------------------------------------------------------------

The private sector should concentrate for investment in the Master and Regional plan by virtue of erecting tourist facilitating infrastructure at the spots identified in the Regional or Master feasibility studies being carried out by the consultants. The private sector be provide with land and all basic services at the proposal of govt service at very nominal charges on long term lease basis through the Sarhad Tourism Corporation.

IDENTIFICATION OF THE AREAS FOR INVESTMENT BY PRIVATE SECTOR AND STC AS JOINT-VENTURE.------------------------------------------------------------

There can be areas where part of the funds support permissions concessions those can be grated to the private sector by STC as part of capital investment required for the project to be executed by the private sector and thereby STC will earn in the long term and adequate amount to run its operation and maintenance costs. However all the partnership with the private sector make carefully be scrutinized by the govt. through hiring special services organization such as Arthur D. Little investment organization for attracting and pooling funds for viable tourism related infrastructure.

KEY AREAS FOR INVESTMENT BY PROVINCIAL GOVERNMENT SECTOR AND STC AS JOINT-VENTURE.------------------------------------------------------------------

The govt. has vary easily available resources in the form abandoned, difficultly maintained and outdated buildings in the form of rest houses, inspection bungalows and out posts that can be renovated by STC and run on a sustainable environment friendly entrepreneurship basis. The present list of STC indicates around 60 properties in NWFP in addition to 18 properties specifically in Chitral which can be right away transferred to STC for renovating and operationalizsing on commercial through leasing out to the private sector.

THE MANNER OF PROPOSED PARTICIPATION WITH THE PRIVATE SECTOR AND THE PROVINCIAL GOVERNMENT IN SECTORS RELATED TO TOURISM. ------------------------------------------------------------------

It is almost five years that corporation have been formed and a fairly outline of the areas that have been highlighted above can be set to further improved finances availability by hiring the services of an expert international lobbyist cum advisor such as the Arthur D. Little.

For any partnership that is important is the basic details are work out including its present and future indications. There is no doubt that economic internal rate of return or for that matter financial rate of return is the most profitable in terms of opportunity investment of tourism. There are successful tourism alight industries in the world that has not only generated income for sustaining not only those organization but have even resulted in charitable grants for other source social infrastructure from the corporations's income. In terms of investment equity, property, credit and guarantee for loans if any to be obtain from loan to international lending organization has to be outlined as following:

a)EQUITY:

It is very important for any project to be self sustaining in the long run but to start with hard cash is required to make it working from paper planning to physical implementation. Therefore an overall outlay of cost has to be drawn for example as given below:

Example: Cost of provincial master plan estimated @ of Rs. 1 thousand billion has to be divided into five equal parts out of which one part would be provided by STC to grant in aid from the govt in form of land, building and equipment etc., alongwith guarantee for loans or making available line of credit for landing it to the private sector to cover up the other four parts of the total cost of the master plan as estimated one thousand billion. This works out to be eight hundred billion investment by the private sector two hundred billion investment by the Govt. through STC in the form of concession, guarantees, loans and leases etc.

b)PROPERTY AND LAND AS CONTRIBUTION:

Any land of the govt can be leased out to the STC on short, long and medium terms basis by mutually agreed proportions of investment settle with the private sector. However international lobbying for obtaining concession, guarantees OR international loans require the services of an expert organization that is recognize by the international law and for that matter by the international financing organization such as Arthur D. Little etc.

c)CREDIT:

International lending organizations including the Asian Development Bank, all the commercial private and public banks and the international financial institutions have special credit line for viable sustainable tourism infrastructure programme. In order to make the participation of international, regional, local and area specific entrepreneurs in equal proportion it is important that an expert financial institution consulting services be engaged on a long term basis that would pay of itself out of the profit that are accrued to the corporation and the govt. after the commissioning of most of the tourism development plans.

d)LOANS GUARANTEE:

For providing maximum opportunity to the tourism sector the govt. through the Sarhad Tourism Corporation with the support of Khyber Bank and National Investment Committee would enter to the agreement with an internationally sound and upto the mark financial advisors to divert the required foreign exchange for the tourism sectors to develop on sustainable basis as an income generating industry.

OUT LINE OF THE PROCEDURE OR IMPLEMENTATION OF PARTNERSHIP VIA THE NATIONAL INVESTMENT COMMITTEE THROUGH INTERNATIONAL FINANCIAL ADVISOR BY THE STC THROUGH GRANT IN AID FROM THE GOVT. OF NWFP FOR PROMOTING TOURISM AS AN INDUSTRY.-------------------------------------------------------------------

The Govt. of NWFP has received an offer from an international financial expert organization recognized internationally namely Arthur D. Little that may be engaged through the national investment committee by making responsible the Sarhad Tourism Corporation as the principal representative of the govt of NWFP for promoting tourism in the province. The Govt of NWFP after the engagement of international financial advisory services ask the Sarhad Tourism Corporation to offer at nominal lease initially govt land and properties through the national investment committee for providing an incentive to the private sector and taking up tourism an industry. Transparency in financial management of the long term plans be achieved through revising sustainable operation plans by the international expert advisory service engaged through STC by the Govt. of NWFP involving the national investment committee for concluding agreements with the international financial institutions that are not less than the required amount of the total out lay for the tourism sector in the next century in the province.