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

1. Getting ready:
Scoping, design and feasibility
Anna Spenceley
1 June 2017
Time Block 10
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3. Motivation: Reasons for concessioning &
partnerships, objectives and targets
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Risk: Community jobs/benefits
Conservation management

4. WBG Guideline: Spenceley et al, 2016; adapted from Mitchell , Keane and Laidlaw, 2009
Financial benefits from tourism on
Mt Kilimanjaro, Tanzania

5. Previous experience:
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Expertise & transaction
advice
Process used:
tender, auction,
direct award etc
Existing concessions:

6. Access & infrastructure
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Attractiveness to investors: Uniqueness
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Pollution
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Threats
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7. WBG Guideline: Spenceley et al, 2016

8. Legal framework:
UNDP Guideline: Thompson et al, 2014

9. Political will and financial support:
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10. Creating a strategic plan:
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11. 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?

12. Resources:

14. Protected area and site identification:
IFC, 2009
IFC, 2009
• Workshop
• Field trip
• Public presentation
IFC, 2009

15. Protected area and site identification:
IFC, 2012
IFC, 2009
Site 1 Site 2 Site 3 Site 4

16. 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

17. 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

18. Stakeholder engagement:
Adapted from WBG Guideline, Spenceley et al, 2016

19. Design of the opportunity 1: Model
WBG Guideline, Spenceley et al, 2016
Singita Rocktail beach Thakadu

20. Design of the opportunity 2: Product type

21. 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

22. Viability and market assessment:
WBG Guideline, Spenceley et al, 2016;SADC guidelines: Spenceley 2014

23. 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?

24. 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

25. Value-for-money for authorities:
Adapted from WBG Guideline: Spenceley et al, 2016

26. Value-for-money for authorities: Time vs method
WBG Guideline: Spenceley et al, 2016 adapted from Thompson 2009

27. PPP Toolkit
Worked example: iSimangaliso

28. WBG Guideline: Spenceley et al, 2016, ciXng Thompson, 2008
Example: Benefits to government, communities
and the private sector

29. 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

30. Resources:

31. 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)

32. 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