Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

South African National Parks Concessions processes Giju Varghese


Published on

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)

Published in: Travel, Business, Technology
  • Be the first to comment

  • Be the first to like this

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 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: