SUCCESSFUL tourism destinations create a seamless, superlative visitor experience in every intervention that a tourist encounters. This calls for integration amongst a vast set of agencies responsible for the diverse services sought by the visitor. Many destinations have demonstrated the ability to review these complex relationships and arrive at creative solutions to deliver an excellent standard for the visitor without compromising on safety and security aspects, containing their efforts within available resource limits. This has been made possible by embarking on a slew of initiatives involving Public Private Partnership models, now extended to include even the processing of visa applications.

Why Public Private Partnerships (PPPs)? You only have to visit toilets built and operated by any of the Delhi municipal bodies, those managed by Sulabh Sauchalaya, and those managed by Flumes (at Lodhi Garden, Khan Market, across Pragati Maidan) if you need any persuasion on the merits of exploring PPP models. There are already good examples of the disposal of solid waste, providing vertical parking, building bus terminals or roads and bridges, and operating state tourist bungalows.

The public and private sectors usually have distinctive, but potentially complementary roles to play. PPPs enable the public sector to benefit from commercial dynamism, the ability to raise finances in an environment of budgetary restrictions, innovation and efficiencies, harnessed through the introduction of private sector investors who contribute their own capital, skills and experience.

The positive characteristics of PPP arrangements for infrastructure development appear particularly attractive to developing countries like India given the enormous financing requirements, the equally large funding shortfall, the need for efficient public services, availability of a pool of private finance (banks, institutions, insurance companies, equity/mutual funds and individual investors), growing market stability and privatization trends creating a favourable environment for private sector participation.

What is Private Finance Initiative (PFI)/PPP? A PPP is all about creating a structure in which improved value-for-money is achieved through private sector innovation and management skills delivering significant performance improvement and efficiency savings. PFI is one of the most developed forms of PPP which offers government the opportunity to involve private sector management and capital in modernizing and improving the quality of public services, without undermining the government’s responsibility to the taxpayer for the quality of the service provided.

PPPs are not vehicles for privatizing public services since the government retains full political accountability for the service; rather they are simply a means by which the government can use what the private sector offers to improve its own performance. This is done by establishing arrangements by way of legally binding contracts that will bring benefits to both sectors. The private sector needs to earn a return on its ability to invest and perform. The public sector wants to deliver services to the standard specified and to make the best use of public resources. PFI is seen to provide services and facilities considerably faster than under traditional procurement, thereby delivering better value to the taxpayer.

The most common types of concessions are build-operate-transfer (BOT), build-operate-own-transfer (BOOT) and design-build-finance-operate (DBFO). The predominant model for a PFI is the DBFO, followed by free-standing projects and joint ventures.

 

Under DBFO, services are sold to the public sector which pays only for the services delivered by the private sector. Under this arrangement, PFI is expected to lead to more private sector involvement in the operation of assets, since many of the value for money gains in such projects come from the benefits of combining asset design, construction and operation.

In financially free standing projects the role of the public sector is limited to enable project development by undertaking some of the initial planning, licensing, providing ancillary works or assisting with statutory procedures, whereas the private sector undertakes the project on the basis that costs will be entirely recovered through charges for services to the final user.

Joint ventures are those where the cost of projects is met partly from public funds and partly from other sources of income, while overall project control rests with the private sector.

 

PPPs could bring the following benefits – Acceleration of infrastructure provision: PPPs often allow the public sector to translate upfront capital expenditure into a flow of ongoing service payments which helps overcome paucity of public capital.

Faster implementation: the allocation of design and construction responsibility to the private sector, combined with payments linked to the availability of a service provides significant incentives for the private sector to deliver capital projects within shorter construction timeframes.

Value for money: ensures delivering projects at best net present value.

Partnership building: facilitates economic development and regeneration where local authorities can encourage private investment by transferring assets and use asset value rather than cash as their contribution.

Enhanced public management: creates the framework for better governance.

Genuine risk transfer: risks are allocated between the public and private sectors to the party best able to manage them to ensure best value for money.

Output specification: contracts specify the service outputs required rather than the configuration of the capital asset itself or how the service is to be delivered. The emphasis is on defining the type of service and performance standards required. This allows the private sector to deliver these outputs through innovation in the design and construction of the physical assets, or on the method of subsequent operation

Whole life asset performance and reduced costs: PFI contracts commonly require the contractor to take responsibility and assume risk for the performance of the asset and at the same time provide strong incentives to minimize costs over a significant part of the life of a project

Performance-related reward: payments are subjected to performance in relation to specific and quantified criteria in the contract. These are derived from the specification of the standard of service required.

Private investment promotion: the capital assets required to deliver public services efficiently are procured by bringing in private sector finance and operational management on a risk-taking basis.

Improved quality of service: international experience suggests that the quality of service achieved under a PPP is often better than that achieved by traditional procurement

 

In India, public agencies usually tend to assume a regulatory attitude, while private organizations, in their bid to woo the visitor and act as a facilitator, often cross undefined boundaries. Relationships between different public agencies tend to be governed by processes which are not easily service-oriented, customer-friendly and efficient. The only alternative talked about to managing an enterprise in the public domain has been to privatize loss making units while other avenues remain unexplored. The government agencies perceive private enterprise as focused on profit at any cost, without any corporate or social responsibility. The private sector’s view of government agencies is equally skewed.

 

The capacity of tourism to generate employment and enhance economic development has now been well established and acknowledged. Just a few initiatives like a more liberal civil aviation policy, a better on-line booking process for Indian Rail, and the improvement of roads combined with the entry of new vehicles, have resulted in a spectacular growth in domestic tourism. This has helped redress the excessive obsession with the Caucasian long haul tourists. However, a linear approach of tackling one issue at a time will cause fractures, which could turn away visitors. This is no better reflected than at Bangalore where the traffic is horrendous, hotel tariffs extremely high and the service standards so appalling that there is no hope of the business traveller staying on for a leisure extension or returning for a family holiday.

Tourism can be used to showcase partnerships between ministries, between centre and state, and amongst the community, entrepreneur and civic bodies.

Let us try and explore how successful partnership alternatives have worked elsewhere or in other sectors and see how they can be used to realize the true value of tourism in India.

Before you get here: In India, the US embassy was the first to outsource the processing of visas at Chennai, and the UK, other European countries and Australia and New Zealand quickly followed this initiative, extending the services across India. Two private organizations have dominated this space in India and evolved a successful commercially viable business while extending superior services to the applicant and at lower costs to the diplomatic missions. Australia has introduced smart cards, fingerprint identification to create fast tracks for frequent travellers. UK has predeparture immigration at ferry points in Europe and on board the ferry, thereby allowing passengers to disembark without delay on arrival. Many countries have on-line facilities to submit applications. Clearly there is an urgent need to review our policy towards visas and their processing.

 

Access: while we have debated privatization of our airports, the delay in implementation has been unpardonable. There is also lack of clarity on what we mean by having a world-class airport, as most people seem unable to distinguish between a swank terminal and a functional airport complex. Most successful airports are based on adhering to high service standards at competitive rates and with the promise of adequate year round traffic with a good mix of inward and outward flows of business and leisure travellers.

Nearly 30 to 40% of the revenue of mature airports comes from non-aviation related activity such as retail, food, accommodation, transport and allied services. Ground handling, traffic rights, landing charges, over-flying charges, parking fees, maintenance, refuelling and warehousing are the more traditional revenue sources. The example of Dubai Airport is worthy of emulation in this regard.

Our resources and current trends in traffic would suggest that we could aim to have no more than eight long haul airports, an additional 20 short haul airports, 60 domestic airports and 120 airstrips. Currently we have about 440 airstrips, about 120 airports with 90 operational of which about 10 handle 80% of the load and only five are commercially viable. An international airport would ideally require about 5000 acres of land in an environment where there is low rise, low habitation in a three kilometre radius. Most cities have developed their airports at least 40 km away from city limits and in some instances as far away as 100/120 km. In this way, the entire tract of land along the 100 km corridor gets vitalized, and land near the original older airport becomes available for commercial exploitation, thereby generating resources for the new airport.

This should be considered for Mumbai where there is insufficient land for expansion, at the same time subsidizing the infrastructure improvement through other commercial activity. It would help to enter into a strategic alliance with Dubai and Singapore airports to take advantage of their current superior facilities and treat them as hubs for feeding into our 20 short haul airports for the next 10 years. All the 120 airstrips can be in the private domain. There should be an impetus given to flying schools, given the large number of pilots required to meet the fleet expansion plans of airlines.

 

India has a relatively unexploited coastline and rivers which could be used for cruises and ferries. This would require development of harbours, cruise terminals and jetties, and patrolling/dredging to enable private enterprise to operate vessels. A good place to start may be Mumbai, now that the major naval facilities have moved to Karwar. Goa, Cochin, Chennai and possibly Puri could follow, also linking the Andamans. Once again, by having a strategic alliance with Dubai and Singapore as well as Colombo, Male and Karachi, we could vitalize our coastline.

For the Andamans, linking the eastern coast and providing connectivity to Phuket and Langkawi could be contemplated. Reviving the Bengal-Assam network with permission from Bangladesh would make the North East more accessible. Similarly sections of other rivers could be considered for tourism. A start could be made by making the 19 km stretch of the Jamuna traversing Delhi into a river again, from the drain that it currently is. One would have thought that the whole purpose of hosting the Commonwealth Games and selecting the riverside venue was to enable this. Surely the conversion of the 7000 acres of the wasteland along the river into a vibrant riverfront environment would more than pay for the exercise.

 

Our extensive rail network and expanding road network needs to be integrated with urban mass transport systems with the creation of inter-modal transport hubs and here we can take a cue from Spain and specifically Barcelona, which used the Olympics to create this infrastructure. The idea is to create a massive hub and use vertical space over the hub for a mix of food outlets, retail and entertainment venues which are ensured of a regular footfall and commercial activity, and would pay for the public utilities. The make-over of Gloucester Road, Paddington and Hammersmith could be used for inspiration.

Highway amenities too need to be clustered into integrated units, ideally in association with petrol stations. Public conveniences, overnight sleeping facilities, food outlets, first aid, ATM, mobile recharge and cyber café, breakdown vehicles and ambulance services should be available at regular intervals. These could be used to provide outlets for local produce, showcase local crafts and used for night schools/evening congregations where relevant.

 

Accommodation: affordable accommodation is a challenge which needs urgent attention. Current land use and building regulations have caused imbalances and these need to be altered. Essentially, accommodation needs to be made available at central business districts that attract out of town visitors – at transport hubs, near religious places, visitor attractions, medical facilities and within the periphery of educational establishments, sports stadia and hospitals. Serviced apartments at gated communities, B&B accommodation and family stays, and bringing the guest houses, lodges and unauthorized units within a regulatory framework with appropriate levels of hygiene is essential. The treatment of charges for water, electricity, taxes for these smaller establishments must encourage compliance.

Government run establishments including tourist lodges and bungalows, hotels, forest lodges, state bhavans, dak bungalows and PWD rest houses must be restructured to improve revenue streams without impairing their use within the allowances for officials. For instance, Nagaland House on Aurangzeb Road could receive a total make-over and also have 20 rooms added and have a cafeteria, restaurant, crafts outlet, car hire facility, and ATM, bank, post office and entertainment zone. There could be themed evenings on Fridays and Saturdays.

The cost of the make-over and the transformation would be taken care of by a private entrepreneur who would also continue to provide services at existing rates for the officials, generating revenue from the other rooms sold to normal clients, from food sales, rentals and tickets for the themed evenings. Likewise, accommodation vouchers could be provided to forest officials with blackout dates for peak periods which they could encash for alternate destinations by a timeshare mechanism.

Attractions: visitor centres, retail outlets, food outlets, parking and entry tickets for most attractions could be privatized with appropriate guidelines. Here again the experience of museums in UK which were deprived of their entrance ticket sales by making them free would be valuable as they found alternate funding routes including sponsorship, hiring out the venue for corporate hospitality events, enhanced food and retail sales, membership drives and other measures. In the first instance, one could start the initiative with monuments outside the purview of the ASI, but to make a real difference the ASI itself would need restructuring. Critical monuments should be run as independent entities.

 

Alternate interventions: military tourism – The Prime Minister’s visit to Moscow to commemorate the 60th anniversary of the end of WW II should serve as inspiration for show-casing India’s rich military legacy, which will serve in generating nostalgia and motivational tours while providing gainful and honourable employment to ex-armed forces personnel, war widows and other worthies who have contributed to the military cause in India.

One would need to be conscious of security and sensitivity concerns while embarking on such initiatives which could include the interface of civilians and armed forces on an ongoing basis, the access to foreigners to privileged areas and the sentiments of the armed forces, who may not want such an initiative at all.

Already there are at least two annual group departures to the Kohima War Memorial promoted by Jim Edwards who started Tiger Tops at Chitwan in Nepal. Regimental anniversaries receive visitors, but these are not structured to enhance revenues. In Britain, the 50th anniversary of World War II was used to generate additional visitor traffic, establish contact with kith and kin of participating soldiers and to create a permanent legacy for future generations to enjoy.

Baroness Flather campaigned relentlessly to have a memorial created to honour the contribution of Indian regiments in wars overseas and succeeded in having a commemorative arch installed in London and inaugurated by Prince Charles in a solemn ceremony.

 

Fortunately the tradition of maintaining records and preserving memorabilia has continued in our armed forces. The institutions set up for training cadets and officers and the cantonments have a glorious tradition. We already have a variety of museums and galleries. Our cavalry, camel regiments and massed bands are the envy of the whole world. Once in a year we get a glimpse of this at the Beating Retreat ceremony.

The need is to create a series of interventions which allow these to be commercially exploited in a sensitive manner, adding a few participative experiences such as an off-road 4-wheel simulated war zone experience, parachuting and other soft adventure options, built with the active participation of commercial private partners.

The Cabinet War Rooms and the Imperial War Museum in London and the Land Rover Visitor Experience could serve as models. At the Tower of London, the resident guides are ex-servicemen. The pride and passion with which they carry out their duties is truly inspiring. Many other countries too, particularly in Eastern Europe, have military related visitor attractions.

 

At a conservative estimate, this should lead to an additional 50,000 international visitor bed nights and direct employment for at least 15,000 personnel directly and about three times that number indirectly. The domestic visitor bed nights would be about five times this number and could be greater depending on the price point.

Leaving aside the commercial benefits, the educative and entertainment value imparted to our school going children and youth, and the motivation to join the armed forces itself should be adequate reason to embark on this endeavour.

There would be similar opportunities in looking at jungle experiences, educational and vocational programmes, culinary tours, spiritual tours/wellness/alternate therapy, farm stays, sports tourism and so on, which would take the Incredible India campaign to its logical goal of using a slogan to deliver a dream of empowerment to an emerging youthful India through tourism. This could translate to a scenario described below:

2010. Imagine arriving into Delhi, landing on the new runway at Palam on a large new generation aircraft. The plane glides into its allotted slot and the aero bridge leads to four zones, one each for resident Indians returning home, another for diplomats and government officials, a third for visitors arriving without a visa, and the fourth for those who have a visa or do not need one. Rows of touch screens with helpful immigration facilitators allow you to use fingerprint identification and smart card technology to breeze through, crossing a health check walkway to collect your baggage which has arrived by this time. Pause at the duty free, exchange money or buy a debit card where the value gets loaded according to your needs, and buy a local city visitor smart card. Pass another walkway this time for customs, and choose from taking the metro, airconditioned high capacity bus, scheduled or tourist taxi or private car park.

The metro ride leads to an inter-modal transport hub where an interchange allows you to reach a tourism economic zone with a variety of accommodation options rising above food courts, retail outlets and entertainment areas. Other accommodation options include staying on a university campus, in a hostelry adjacent to a sports stadium, staying with a family, in a service apartment or at the inter-modal transport terminus itself.

 

A direct bus takes you to the Red Fort complex terminus where you can take a free shuttle to the fort entrance. You swipe your visitor card to gain entry after using your debit card to buy a headset and handheld navigation tool with an explanatory leaflet including a graphic map. A darkened tunnel leads you to an environment straight out of Mughal times. Meena Bazaar brought alive with myriad stalls selling artifacts, food courts, entertainers, and rows and rows of costumes for you to try and be photographed and relive the times and lives of a different era.

As you pass these into the more formal area of the fort, signages matching your map help you use your handset to listen to relevant commentary interspersed with music, sounds and images on a small screen light up to enhance your experience.

You can step into kiosks, which give you virtual experiences of banquets, court scenes, pageantry, battles that let you absorb the history through an interesting mix of education and entertainment. Other zones accessible by using your debit card include fine dining areas, battlegrounds where you can kit yourself as a warrior and enter into battle, pretend you are a nobleman entering a mehfil with live entertainment, or join a royal banquet.

Finally your exit leads you past a set of more formal retail outlets selling souvenirs and gifts, which can be delivered to your place of stay. Enjoy the views along the riverfront before boarding your traditional boat for a journey downstream allowing you to disembark at the Humayun tomb complex.

Visitor traffic to Delhi has trebled since 2005 and average length of stay has increased from two to five days for the city. Local residents themselves now spend considerable time at the many museums and galleries, which have been transformed from fossilized boring places to lively attractions with good interpretation centres, interactive environments, retail outlets, food courts that encourage families to discover and feel proud of their own cities. With a Tussauds inspired cricket resource centre at Feroze Shah Kotla, a Dhyan Chand retrospective at the National Stadium, where you have play zones allowing you to play virtual games or try and score of a penalty corner in an automated environment, a new exhibition at the National Gallery of Modern Art, a Mahabharatha Theme Park at Dwarka – the list of things to do and experience in India’s capital city has become inexhaustible.

Can we deliver the dream or will we only daydream?