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