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)

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 Partnerships
SANParks 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. 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
Exit
Weaknesses 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. 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: gijuv@sanparks.org