PUBLIC -PRIVATE PARTNERSHIP FOR PROMOTING TOURISM

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PUBLIC -PRIVATE PARTNERSHIP FOR PROMOTING TOURISM
avantika dhar
avantika dhar

• PRESENTATION BY
• Ms.ARCHANA CAPOOR
• CHAIRMAN MANAGING DIRECTOR
• TOURISM FINANCE CORPORATION OF INDIA LTD.

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Presentation out line

• Brief Introduction about TFCI
• Tourism overview Benefits
• Global and Indian Tourism scenario
• Tourism in India- Key Potential Issues
• Tourism infrastructure Definition
• Why Public Private Partnership(PPP)
• Benefits of PPP in tourism
• Role of stakeholders in PPP
• Project Development Strategy
• The Thenmala Eco-Tourism Story

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TOURISM FINANCE CORPORATION OF INDIA LIMITED
(TFCI)

• A SPECIALISED FINANCIAL INSTITUTION FOR
  PROMOTION AND FUNDING OF TOURISM RELATED PROJECTS
• CATERS TO THE NEEDS OF INDIAN TOURISM INDUSTRY
• PARTNER IN THE GROWTH OF TOURISM

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ABOUT - TFCI

• Incorporation-Based on the recommendations of the
  National Committee on Tourism (Yunus Committee)
  TFCI was incorporated as a Public limited company
  under the Companies Act. TFCI is a Public
  Financial Institution under section 4A of
  Companies Act.
• Regd. Office- IFCI Tower, New Delhi.
• Branch Offices- Chennai, Mumbai.
• Sponsors- All India Financial Institutions
  Banks.
• Status/Objective- All India Financial
  Institution for funding Tourism related projects.

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TOURISM - AN OVERVIEW
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• "Travel Tourism provides an economic incentive
  to conserve a community's natural environment and
  cultural heritage
• Stimulates jobs across the economy, creates
  people to people contact and boosts cultural and
  environmental awareness."
• Travel Tourism is an engine for sustainable
  growth that can benefit all nations - both
  developed and emerging .
• Job creating potential of tourism is tremendous.,
  IT provides jobs to technically qualified but
  tourism provides jobs to illiterates .
• Tourism is a continuing activity touching every
  human being

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BENEFITS OF TOURISM

• Evidence of economic impact of tourism is so
  overwhelming that it is no wonder that
  undeveloped countries seek it and industrialised
  nations wish to protect it.
• The economic benefit of tourism is best
  understood as a gross increase in the wealth or
  income measured in monetary terms , of people
  located in an area over and above the levels that
  would prevail in the absence of activity under
  study.

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Global and Indian Tourism scenario

• Travel Tourism Contributes 10 of the Global GDP
• Global Travel Tourism activity expected to
  increase by 5 in the next ten years
• India
• Foreign Tourists arrivals to India increased by
  12 to 4.98million in 2007
• Foreign Exchange earnings from Tourism amounted
  to US 11620 million in 2007

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Key issues and Potential in Indian Tourism

• Key Potential
• Adventure Tourism
• Pilgrimage Tourism
• Natural Wildlife Tourism
• Recreation Leisure Tourism
• Cultural Tourism

• Key Issues
• Regional Linkages,Access Connectivity
• Accommodation Infrastructure High end as well
  budget
• Basic Civic Infrastructure
• Tourist amenities
• Financial Infrastructures
• Service Delivery Hospitality
• Institutional and Regulatory Issues

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INFRASTRUCTURE FOR TOURISM-WHAT DOES IT INDIICATE

• Infrastructure still remains the most important
  impediment in realising the high potential that
  the tourism industry holds for India.
• Inadequate Accommodation
• Road infrastructure
• Air connectivity
• Lack of basic amenities at tourist centres
• Lack of developed tourism circuits
• Adventure Tourism
• Tourist trains

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INFRASTRUCTURE- Public Sector-Influenced
Investments

• Air Service
• Road Network
• Public Transportation
• Vibrant Urban Centers
• Safety / Security
• Beaches
• Public Park Systems
• Historical Sites
• Museums
• Cultural Arts
• Festivals / Events
• Sports Facilities
• Convention Centers
• Zoos / Aquaria

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INFRASTRUCTURE - Private Sector-Influenced
Investments

• Hotels
• Conference Centers
• Restaurants
• Destination Shopping
• Theme/Amusement Parks
• Sports Facilities
• Golf Courses
• Nightlife
• Gaming

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WHY Public-Private Partnership

• PPPs enable the public sector to benefit from
  commercial dynamism, the ability to raise
  finances in an environment of budgetary
  restrictions, innovations and efficiencies,
  harnessed through the introduction of private
  sector investors who contribute their own
  capital, skills and experience.

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PUBLIC - PRIVATE PARTNERSHIP WHY ?

• Greater integration of policies and practices
  relating to tourism planning by the public and
  pvt. sector is possible.
• Tourism infrastructure- most critical component
  can be financed jointly.
• Public private involvement can help development
  and beautification of tourism projects
• Guides Private enterprises into areas and
  programs in which it would be more successful.

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NEED FOR PUBLIC-PRIVATE PARTNERSHIP (PPP)

• Need to leverage available State finances
• Efficiency improvements in operating systems

Great need for Infrastructure
Capital in search of Investments with Steady
Returns
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Need for PPP (contd)

• Stand alone commercial viability is neither
  necessary nor sufficient for success of PPP
• Make Projects viable
• Leverage scarce resources
• Varying degrees of risk transfer
• User fee based
• Annuity models
• Revenue Sharing

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Need for PPP (contd)

• Private Capital is not only driver
• Efficiency gains in the systems must for
  sustenance of project
• Integrated Contracts
• Design, Construct and operate
• Risk Management
• Incentive Penalty Contractual structures to
  ensure
• Appropriate service levels
• Well defined performance parameters
• Continued improvements through investments

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Strategy Project implementation under PPP

• Choose the projects based on the following
• Project parameters
• Adequate Financial economic rate of return
• Minimal Mitigable environment and social impact
• Related to Tourism infrastructure
• Development Parameters
• Funding development cost fully tied up
• Meaningful achievable project implementation time
  schedule
• Long term vision for sustainable development
• In line with the objectives of the State tourism
  policy, to meet the socio-economic needs and as
  part of long-term strategy

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Role of State Governments

• Umbrella Cover Providing policy over-all support
  to the initiative
• Land Provisioning of Land for projects to be
  developed
• Financial Financing Support where necessary
• Clearances Provision of statutory and project
  specific clearances within its control
• Fiscal Concessions Grant of Fiscal concessions
  to projects
• Project performance Monitoring

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Role of private sector

• Build and manage the required tourist facilities
  in places of tourist interests.
• To undertake industry training and manpower
  development to achieve excellence in quality of
  services.
• To participate in the preparation of investment
  guidelines and marketing strategies and assist in
  database creation and research.
• To ensure preservation and protection of tourist
  attractions and take lead in green practices.

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ROLE OF PRIVATE SECTOR

• Build and operate the required tourist
  facilities in places of tourist interests.
• To undertake industry training and manpower
  development to achieve excellence in quality of
  services.
• To participate in the preparation of investment
  guidelines and marketing strategies and assist in
  database creation and research.
• To ensure preservation and protection of tourist
  attractions, heritages and take lead in green
  practices.

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Role of Public Sector

• Provide public infrastructure facilities
  including local planning and zoning arrangements.
• Provide support facilities and facilitation
  services to private enterprises.
• Introduce regulatory measures to ensure social,
  cultural and environmental sustainability.
• Create nucleus infrastructure in the initial
  stages of development to demonstrate the
  potential of the area.

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Role of public sector cont...

• Ensure that the local community is fully involved
  and the benefits of tourism accrue to then.
• Ensure that the type and scale of tourism
  development is compatible with the environment
  and socio-cultural milieu of the area.
• Undertake research, prepare master plans,
  formulate marketing strategies and organise
  overseas promotion and marketing jointly with the
  industry.

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Role of Public sector ( Contd)

• Provide public infrastructure facilities
  including local planning and zoning arrangements.
• Provide support facilities and facilitation
  services to private enterprises.
• Introduce regulatory measures to ensure social,
  cultural and environmental sustainability.
• Create nucleus infrastructure in the initial
  stages of development to demonstrate the
  potential of the area.
• To identify and establish clear objectives as to
  the range of public and private sector
  development as considered appropriate.

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ROLE OF PUBLIC SECTOR (CONT)

• Ensure that the local community is fully involved
  and the benefits of tourism accrue to them.
• Ensure that the type and scale of tourism
  development is compatible with the environment
  and socio-cultural milieu of the area.
• Undertake research, prepare master plans,
  formulate marketing strategies and organise
  overseas promotion and marketing jointly with the
  industry.

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Benefits of PPP in Tourism Sector

• Acceleration of Infrastructure provision
• Faster Implementation
• Value for money
• Partnership Building
• Enhanced Public Management
• Genuine Risk Transfer
• Output specification
• Asset Performance Reduced costs
• Performance Related Reward
• Private investment promotion
• Improved quality service

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Benefits of PPP

• The synergy between the public and private
  sectors has been a major force in stimulating
  tourism competitiveness in a number of countries
  at national , state/ regional and local levels.
• The development of tourism is best possible if
  created jointly by government and private sector
  with pvt. Sector as dominant partner.
• The private sector can also play a greater role
  in the preservation of monuments .

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PARAMETERS FOR SUCCESSFUL CULMINATION OF
PUBLIC-PRIVATE SECTOR PARTNERSHIP

• Clear planning of respective roles
• Identification of benefits to each partners
• Establishing long term commitment of both
  partners
• Periodic evaluation of the efficacy of each other
  role.

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Some of the successful PPP projects

• Necklace Road Tourism Development Project
  Hyderabad, Andhra Pradesh
• Snow world theme park near Hussain Sagar lake by
  APTDC
• JalMahal Project Jaipur Rajasthan
• Thenmala Eco-Tourism Project Kerala
• Nirmala Bangalore a public sanitation program
  through PPP mode

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THE THENMALA STORY

• Thenmala Eco-tourism" has been conceived as a
  first planned eco-tourism destination in India
  The degraded forest area, in the outskirts of the
  Sanctuary is maintained as a familiarization
  zone. Eco-friendly General Tourism is planned in
  the periphery of the sanctuary. The real
  eco-tourism is takes place in sanctuary and only
  eco-tourists are encouraged for that. Others can
  experience the eco-friendly products such as
  small nature trails, elevated walkway through
  canopies, mountain biking etc.

Thenmala story has been catalogued by WTO in its
publication of Sustainable Development of
Eco-Tourism- A Compilation of good practices
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The results

• Thenmala Eco-tourism Promotion Society (TEPS)
  adopted a strategy to co-ordinate with Forest
  Department, the Irrigation Department and Tourism
  Department and implement various activities in
  association with each Department and each
  department is also represented in the society.
  The products such as trekking, bird watching
  trails etc. developed and implemented through
  the institution of Eco-development Committees,
  thereby ensuring benefits to local people
• The project was opened to the public in 1999
• The project has achieved growth in terms of
  arrivals and revenue generation

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Lessons Learnt from Thenmala

• A community based PPP project requires more than
  planning and funding. The model for development
  which get people interested. Affirming their
  abilities in implementing the project.
• Importance of involving local people in tourism
  development and resources management not only to
  improve the economic conditions of the local but
  also as an essential element for effective
  development.utilization and management of natural
  resources.
• Zoning and effective compliance with land use
  regulation for the different zones are essential
• Any tourism beyond the acceptable carrying
  capacity should be strictly prohibited. The
  carrying capacity can be physical, social and
  economic
• TrIbal and local people are being involved as
  guides and helpers in fostering eco-tourism
  centres activities.which resulted in new
  developmental pattern of rural areas.

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THANK YOU
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