Ppp final project tourism infrastructure

Potential of PPPs to Increase Heritage Site Tourism in India

Unsolicited proposal by:ABC Consultancy

India Tourism Statistics

Domestic tourists in 2013: 11 Billion

Foreign tourists in 2013: 19.5 Billion

Revenue from Domestic tourists in 2013: USD 73.8 Billion

Revenue from Foreign Tourists in 2013: USD 18.2 Billion

Domestic tourists revenue contributed to 82.2% of total

revenues.

Scope for increase in revenue, employability and overall

sector growth if foreign tourists were targeted better.

Heritage sites

32 UNESCO world heritage

sites in India.

As of 2015 there are tentative

submission for another 46

UNESCO world heritage sites.

That makes the total number

of most important heritage

sites for the country 78.

Rough look at heritage sites of India

Need for protection, preservation and maintenance

Social Need

Indian tourism must be

representative of

cultural heritage

and attract international tourists

Economic Need

Quality and quantity of

tourism equates to increase in revenues,

employment generation, and earning

foreign exchange.

Political Need

To preserve and protect

heritage sites is a politically correct need.

Local constituencies

must feel cared for

emotionally and through

revenue generation

Execution Need

Maintaining heritage sites need constant

revenue stream from

tourism and it must outweigh

the growing need for

additional space for modern

development.

Main Organizations supporting Tourism Ministry of Tourism

• 20 offices in India, 14 abroad .In charge of promoting and enhancing tourism in India

Ministry of Culture

• Dedicated to promotion of art and culture of India, all National museums and art galleries fall under this ministry.

India Tourism Development Corporation (ITDC)

• Hospitality, retail and Education company owned by the Government,

Archeological survey of India (ASI)

• Government agency dedicated to archeological excavation, preservation and conservation.

National cultural fund

• Fund set up by Ministry of Tourism and Ministry of Culture for protection and preservation of tangible and intangible Indian Assets.

Indian National Trust for Art and Cultural Heritage 

• NGO set up to protect and conserve India’s cultural Heritage sites both natural and man-made.

Problems with current system Irregularity with land laws and ASI mapping:

Chennai Case study: Communities harassed, asked to move elsewhere. Lack of coordination between town planning and development, ministries,

institutions and knowledge dispersion to public Lack of budget:

For maintenance of heritage sites (preservation, restoration processes, employees, information desks and necessary counters)

To build new infrastructure to enhance tourist visits (resorts, hotels, restaurants)

Lack of connection/ coordination between relevant organizations: State tourism websites are good, but not linked to main tourism website.

Dysfunctional phone and online bookings, difficult to access tourism information, not so professional local tour guides, unavailability of pamphlets, etc. show lack of organizational coordination.

Lack of incentives: Identification, needs assessment, preservation, restoration, protection, daily

maintenance and promotion of site. These call for: o long term planning, commitment, vision and engagement of expertise

How Private Sector may help? Financial Resources:

Potential for constant revenue stream with increase in tourism. Value for money+ cost quality + cost benefits > current system

provision Dedication to proper usage of funds pool (INTACH, ITDC, NCF)

Expertise and burden sharing: Ministry of Tourism and ASI have many sites, not enough manpower

or incentive to make these sites rich sources of revenue. Private sector by virtue of their business will be dedicated to an area

won through tender. Quality control and accountability:

A well thought out framework, clear project cycle checklists and a good contract will ensure quality controls and less finger pointing currently present among various ministries.

Transparency to ensure business keeps on going, more procurement from the government.

Capacity development Rules and Regulations, provision of uniformity, easy access to

knowledge, increase in tourism, increase in standard of living for communities nearby, higher GDP and economic growth.

Reasons for Private Sector to Participate Presently, a closed sector:

Traditionally heritage site tourism has been the mainstay of the Government. The private sector has not had a chance to tap this potential except in peripheral activities.

Reasons: land acquisition, public perception, coordination between many stakeholders, licensing and royalty fees.

A PPP would be apt in dealing with the current need to preserve, maintain , protect and promote heritage sites.

Good revenue stream: PPP innovation models for medical tourism, religious pilgrimage tourism,

hiking tourism, beach tourism, wildlife tourism etc. more robust statistics on where to concentrate, where to develop and where to invest.

Expertise will ensure innovative packages for both domestic and foreign tourists.

So far, we do not have any successful tourism PPP’s in the country. We need steep learning curves for much needed improvement.

Incentives Private sector with a good revenue model are more than willing to undertake

long term planning , implementation , monitoring and evaluation, name recognition, Corporate Social Responsibility (CSR)

Potential Distribution of Services

Solution •Need: To preserve and protect all 78+ cultural sites.•Way Forward: Flourish sites as tourist destinations to maintain upkeep and ensure revenue stream vital for maintenance.

Public Sector •Market research and statistics•Tourism promotion (Incredible India ads, )•Joint revision (all stakeholders) on laws and regulations on land acquisition,

Private sector •Investments in infrastructure eg. Hotels, restaurants, roads, ropeways, cultural shows (eg. light and sound night shows) •Assurance of Corporate social responsibilities•Proper ticketing system, transparent pricing

Joint operations •NGO- skills development/ human resources for training of tour guides•Transportation services: bus, rail, tram, private vans or cars, hop on and off services.•Sustainability analysis, monitoring, evaluation and reporting needs capabilities.

PPP for Heritage sites- Risk Management Identification:

State Laws, Land Acquisition risks, upset social groups Sub- contracting: for eg. Road which leads to a heritage site- who will

collect the toll, chain of command for revenue deposit. Extrapolation of predicted tourists to heritage sites. Extrapolation of forecasted revenues. Cost over-runs with preservation, restoration procedures. Lack of available expertise- historical, archeological

Allocation:◦ In principle, the party most capable to take on particular risks should be

allocated that risk.◦ Government should ensure minimum assurance of monetary return to

the private firm. This can be taken from the funds.◦ Specific allocations will depend on the specific heritage site and its needs.

Conclusion Immense potential:

◦ We recognize that the tourism industry has immense potential not just for preservation of our heritage but also increase in employability, knowledge dissemination and economic growth.

Current system unworkable:◦ Government, for future growth, needs private partnership and skills .◦ Volume of financial needs for heritage sites and related tourism is huge and can

be offered by private sector. It is not possible to rely on tax funded government revenues to develop this sector extensively.

PPP’s have proved to be a great boon for places where they have been developed through proper frameworks and project cycle monitoring.

We believe that PPP’s can assist in infrastructural development of the heritage areas. We also recognize that these require significant consultations with stakeholders.

We propose to start with the non descript heritage sites present in less populated areas and move to the more renowned sites. This will allow for any flaws to be addressed, garner positive public perception, target local private sectors which can deliver.

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