Presentation Objectives                                                                                              Prese...
PPP Project Cycle Accommodation                                                          Strengths     Procurement continu...
THANK YOU               Giju Varghese        Head: Business Development        South African National ParksTel: +27 12 426...
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South African National Parks Concessions processes Giju Varghese

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This presentation by Giju Varghese was delivered at the 'Concessioning tourism opportunities in conservation areas and maximising rural development' workshop, held in Maputo between 19-22 March 2012 (Day 1, Session 3, Concessions processes)

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South African National Parks Concessions processes Giju Varghese

  1. 1. Presentation Objectives Present a Case Study of SANParks concessioning covering: Brief Background of SANParks’ Preparation & Planning; Processes for accommodation; Strengths & Weaknesses; Lessons learnt; o What went well Concessions Processes o What did not Public Private PartnershipsSANParks Background PPP Preparation & Planning Park Management Plan (Conservation, P & C, Tourism Plan); SANParks is a state run Conservation body; Requirement for each park; Manage a system of National Parks: Recreational Activities are identified; 23 National Parks – Kruger & Table Mountain National Parks; Possible tourism product identified (Internal or PPP); Over 4m Hectares of land, 6 Biomes; Core Functions: PPP in SA Context: Pls see website www.ppp.gov.za Nature Conservation; A commercial transaction : state institution + a private party Constituency Building; and o Performs an institutional function, use of a state property for own commercial Tourism – State run tourism infrastructure – Beds (from budget to 5 Star) + 7500k, purpose, assumes financial, technical and all risks, receives a benefit from performing the function. Camping beds +7500k o External – through Commercialization or Public-Private Partnerships In Summary, PPP = transferring risks from state institution to Private Party.PPP Preparation & Planning PPP Project Cycle Accommodation If PPP, SANParks has a Strategic Plan for Commercialization; Inception A medium term strategy that defines objectives, processes, roles; Review the potential for PPPs in the institution Value Objectives from SPfC Prepare Strategic Plan for Commercialisation o Revenue Generation / loss minimization Pre-feasibility Study To establish the indicative viability of the project and to identify specific o Infrastructure upgrades / dev. Of historic and /or cultural sites issues that require detailed analysis o Job creation & BEE Procurement o Tourism promotion Prepare and issue bid documents o Further biodiversity protection and conservation Evaluate bids…
  2. 2. PPP Project Cycle Accommodation Strengths Procurement continued… Strong brands in SANParks stable of Parks: Select preferred bidder & Negotiation Commercialization = Demand > Supply. Sign PPP Agreement Good Governance in SA: Development Nat Treasury / PFMA Reg 16; Measure outputs, monitor and regulate performance, liaise effectively, SANParks is a parastatal (vs state institution, where there is no incentive settle disputes for surpluses). SANParks PPP leadership: Operations Management support; Monitor and report progress Good team ExitWeaknesses Weaknesses Institutional skills for specialized project management of PPPs are Weakness / Challenge? generally low in South Africa: Private sector interest in smaller opportunity; Internal & Consultants Institutional cost of undergoing a PPP process is too high + cost of PPPs are generally geared towards attracting high infrastructure pvt sector to participate in tenders projects: o Further discourages smaller / micro PPP participation Ecotourism projects are often smaller projects and it is the skills Institutional buy-in at an operational level remains a challenge: rather than quantum of infrastructure that are critical to project success Where the interaction happens: state & pvt sector are very territorial.Lessons Learnt: What Went Well Lessons Learnt: What Went Wrong Important to build & maintain a corporate culture that promotes PPP execution: Partnership Maturity: PPP terms are often longer than government / board / management State’s long-term view vs pvt sectors short-term one; lifecycles – continuity is important. Lodge Sector: State’s role in conservation: Few large players, mostly SMME (relates to previous point); Ultimate guarantor (little ROI): only shorter-term tourism is concessioned Outsourced Activities: Consistency in approach to all PPP projects Especially restaurants. Tourism = Brands, SPV = Newco, Consultative Approach to PPP: Technical Aspects vs others (financial & social) Buy – in internally, at strategic levels are excellent. Dependant on technical. Relative weighting should be higher to avoid Effective and competent centralized contract management. market failure.
  3. 3. THANK YOU Giju Varghese Head: Business Development South African National ParksTel: +27 12 426 5276, Mobile: +27 82 906 1979 Fax: +27 12 343 3849 E-mail: gijuv@sanparks.org

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