Environmental Engineering Reference
In-Depth Information
SANParks' Boards and EXCOs change and the responsible personnel for strategy
execution and maintenance change. However, the only constants are the contracts
that are entered into, which are, in many cases, for a period of 20 years. While
SANParks' leadership encourages an adaptive culture, it is necessary to maintain
the view that the Commercialization Strategy is consistent with the core values
and business principles at all levels and with all stakeholders.
Losing control of activities
All of the functions that are performed by the private sector are as a result of
SANParks' mandate to provide access to pristine conservation areas. These
functions are contracted out for a period of time and such a structure, in princi-
ple, allows for SANParks to resume these functions subsequent to the term.
However, the execution of the strategy did not make provision for SANParks to
take over functions at an earlier stage. Post-contract awards highlighted poor
service delivery in all restaurant contracts, however, SANParks had lost the
competencies to resume this function. In order to effectively manage and not lose
control of any activity that is contracted to a private party, it is important to have
sufficient understanding of the activity.
Creation of oligopolies and contract management
While there are various restaurant and retail operators in South Africa, the accom-
modation sector, and particularly the luxury ecotourism game lodge market is very
limited and often managed and controlled by a few companies, or an oligopoly,
which is not ideal for free market participation or new player entry into that indus-
try. It is important to understand the dynamics of such a situation: often oligopolies,
especially in the case of South Africa, previously enabled a few companies access to
large areas of land at a low cost, and, with this advantage, they have established
relatively strong brands in that limited market.Typically, it becomes difficult for new
entrants to enter the market and these companies compete amongst themselves.
There may be a few further awards and recognition mechanisms and most of the
same companies are recipients of these. As SANParks' private lodge operations are
not intrinsically linked with SANParks - in a similar way to the retail and restaurant
operations, output is often determined by their ability to pay the rent owed to
SANParks. A revision of the financial model provided some form of rent relief to all
lodge operators; however, because of limited control of that activity, SANParks is
often forced to assume the technical capability of the lodge operator as they are
significant players in a limited industry whilst requirements for rent relief and an
extension of the term is frequently requested. The negative impacts of an oligopoly
was evident during the revision of the financial model for the lodge operators where
one or two of the 'leaders' of the lodge industry mobilized all other KNP lodge
operators and took the lead in presenting a collective case to SANParks. The spirit
of partnership by the lodge operators may be questioned, as contracts awarded are
specific and not collective. This poses the question of whether such actions are
typical to oligopolies. It is therefore intended that the focus on accelerating private
participation in the lodge sector will be less in future projects.
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