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Getting ready: Scoping, design and feasibility, Anna Spenceley

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Presentation made at the CBD/IUCN TAPAS Group meeting on "Tourism partnerships and concessions in protected areas: Cooperating for success" meeting in the iSimangaliso Wetland Park

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Getting ready: Scoping, design and feasibility, Anna Spenceley

  1. 1. Getting ready: 
 Scoping, design and feasibility Anna Spenceley 1 June 2017 Time Block 10 Image © congerdesign via Pixabay
  2. 2. Motivation: Reasons for concessioning & partnerships, objectives and targets Image © B=NikolayFrolochin via Pixabay Image © Ptera via Pixabay Image © AlexasFotos via Pixabay Risk: Community jobs/benefits Conservation management
  3. 3. WBG Guideline: Spenceley et al, 2016; adapted from Mitchell , Keane and Laidlaw, 2009 Financial benefits from tourism on Mt Kilimanjaro, Tanzania
  4. 4. Previous experience: Image © Tumisu via Pixabay Image © SUCCO via Pixabay Expertise & transaction advice Process used: tender, auction, direct award etc Existing concessions:
  5. 5. Access & infrastructure Image © FrankWinkler via Pixabay Attractiveness to investors: Uniqueness Image © MonkaP via Pixabay Pollution Image © Joemurphy via Pixabay Threats Image © Darkmoon1968 via Pixabay
  6. 6. WBG Guideline: Spenceley et al, 2016
  7. 7. Legal framework: UNDP Guideline: Thompson et al, 2014
  8. 8. Political will and financial support: Image © sasint/229 via Pixabay
  9. 9. Creating a strategic plan: Image © geralt via Pixabay
  10. 10. Decision checklist: Scoping Decision checklist for scoping Yes No Comments Mo6va6on: Government moXvaXons, goals and objecXves clear? Previous experience: ExisXng concessions? How procured? Sustainability integrated? Human resources accessible? A>rac6veness to investors: AestheXcs, market demand, infrastructure, level of damage? Legal framework: Management plan? Laws sufficient for investment? Authority can re-invest revenues? Poli6cal will: Ministerial support? Red-tape excessive? Good governance? Financial support for process? Champion?
  11. 11. Resources:
  12. 12. Protected area and site identification: IFC, 2009 IFC, 2009 •  Workshop •  Field trip •  Public presentation IFC, 2009
  13. 13. Protected area and site identification: IFC, 2012 IFC, 2009 Site 1 Site 2 Site 3 Site 4
  14. 14. Legal assessment: Na6onal level Protected area/concession level ExisXng legal framework Responsible authority: process & agreement Stable land tenure Legal procedure for applicaXons/ approvals ExisXng binding commitments ExisXng rights / licenses Permission for infrastructure SpaXal plans (within management plan) RegulaXons that affect business: tax, labour, imports, compeXXon, EIAs etc Map of exisXng rights/licenses Gaps / reforms required Adapted from IFC, 2012
  15. 15. Stakeholder engagement: GOOD STAKEHOLDER ENGAGEMENT Stakeholder idenXficaXon & analysis InformaXon disclosure Stakeholder consultaXon NegoXaXons and partnerships Grievance management Stakeholder involvement in project monitoring ReporXng to stakeholders Management funcXons Adapted from WBG Guideline, Spenceley et al, 2016
  16. 16. Stakeholder engagement: Adapted from WBG Guideline, Spenceley et al, 2016
  17. 17. Design of the opportunity 1: Model WBG Guideline, Spenceley et al, 2016 Singita Rocktail beach Thakadu
  18. 18. Design of the opportunity 2: Product type
  19. 19. Design of the opportunity 3: Duration Adapted from Spenceley et al, 2016 Table 3, and Thompson et al, 2014: Table 5.2 Type Length Examples Concession 10-40 years AccommodaXon, restaurant, retail Lease / management contract 5-30 years Fixed infrastructure: accommodaXon, airport, restaurant, shop License Up to 10 years Vehicle-based tours with operator equipment (e.g. game drive, balloon trip) Permit Up to 10 years AcXviXes like guiding, canoeing, hunXng using operator equipment VariaXon in length – for same product type – depending on level of capital investment
  20. 20. Viability and market assessment: WBG Guideline, Spenceley et al, 2016;SADC guidelines: Spenceley 2014
  21. 21. Setting fees: Process: transparent, fair, consistent •  Supply-driven: Value proposed and offered by authority •  Market-driven: Unsolicited applications from investor •  Revenue-based: % of gross revenue of concessionaire (e.g. with minimum payment) •  Per-unit fees: $ per hectare •  Fixed-fees •  Combinations When does the concessionaire start to pay fees?
  22. 22. Commercial viability for investors: Considerations: •  Capital required •  Operating expenses (fixed and variable costs) •  Break-even income for concessionaire: no. sales x rate •  Use of debt-finance (i.e. interest or not) •  Minimum fee that is affordable to the concessionaire Evaluate: •  Can a concessionaire afford the project? •  Is it affordable/a good investment over the concession period? Adapted from PPP toolkit, South Africa
  23. 23. Value-for-money for authorities: Adapted from WBG Guideline: Spenceley et al, 2016
  24. 24. Value-for-money for authorities: Time vs method WBG Guideline: Spenceley et al, 2016 adapted from Thompson 2009
  25. 25. PPP Toolkit Worked example: iSimangaliso
  26. 26. WBG Guideline: Spenceley et al, 2016, ciXng Thompson, 2008 Example: Benefits to government, communities and the private sector
  27. 27. High-level business plan: •  Goals and objectives •  Products and services to be developed •  Concession model: i.e. management, lease, Build- Operate-Transfer etc •  Business model: e.g. private sector, joint-venture, community-owned enterprise •  Industry and market analysis •  Development impact: $, jobs, protection, skills developed •  Sustainability plan: environmental, social, economic •  Project schedule: procurement process, duration, exit. •  Marketing plan •  Financial plan and projections + scenarios •  Critical risks and assumptions + mitigation plan. •  Monitoring and evaluation
  28. 28. Resources:
  29. 29. Working groups: Design and feasibility Group 1: Win-win deals •  Discuss how to find the best deal - balancing authority & investor financial needs. •  List process the PA authority should use to find a win-win deal on fees in relation to the revenue the investor may get. Group 2: Choosing a concession model •  What criteria would you use to decide whether to seek a private, NGO, community or joint-venture investor? •  What are the costs and benefits of each? (financial, environmental, social etc)
  30. 30. Working groups: Feasibility Review the iSimangaliso case – 5 min •  Group 1: Value for Money Indicators •  Group 2: Preliminary Environmental Assessment •  Group 3: Preliminary Market Review •  Group 4: Risk Assessment •  Group 5: Stakeholder analysis

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