Red Sea Marine Protectorates Revenue Generation Options
Total Page:16
File Type:pdf, Size:1020Kb
MOBIS Task Order 263-M-00-00002-00 Red Sea Marine Protectorates Revenue Generation Options Submitted by: Dr. Michael E. Colby et al. February, 2003 Program Support Unit Egyptian Environmental Policy Program Cairo, Egypt International Resources Group, Ltd. 1211 Connecticut Ave NE, Suite 700 Washington, DC 20036 Contract Fact Sheet USAID Contract: MOBIS Task Order No. 263-M-00-00002-00 Contract Purpose: Provide core management and analytical technical services to the Egyptian Environmental Policy Program (EEPP) through a Program Support Unit (PSU) USAID/Egypt’s Cognizant Technical Officer: Holly Ferrette Contractor Name: International Resources Group, Ltd Primary Beneficiary: Egyptian Environmental Affairs Agency (EEAA) EEAA Counterpart: Dr. Moustafa Fouda, Head of Nature Conservation Sector. EEPP Policy Objective: Enhanced management and conservation of Red Sea coral reefs, islands, and linked ecosystems of importance. EEPP Policy Measure: EEAA develops revenue generation and funding mechanisms for Northern Zone Work Assignment Title: Red Sea Conservation Finance: Budgets, Revenue Generation, Valuation Work Assignment Author: Dr. Michael Colby Work Assignment Supervisor: John McEachern Red Sea Marine Protectorates Revenue Generation Options February 2003 TABLE OF CONTENTS List of Figures and Tables..............................................................................................d Acknowledgements .. ....................................................................................................e List of Acronyms and Symbols...................................................................................... f EXECUTIVE SUMMARY.................................................................................................... i 1. Introduction ................................................................................................................... 1 1.1 Background ........................................................................................................... 1 1.2 Context: it takes money to make money (investing in conservation and resource management is necessary to sustain the Red Sea’s tourism-based economy) ......... 2 1.3 The chicken and egg paradox: which comes first, funding or protectorates?........... 3 1.4 Supporting studies and consultations...................................................................... 4 2. The Current Situation.................................................................................................... 6 2.1 The existing fee system in the Red Sea.................................................................. 6 RSMP Fees ........................................................................................................ 6 Governorate Fees ............................................................................................... 6 Fees charged by other Ministries and the private sector ...................................... 7 2.2 Current RSMP visitation rates and revenues.......................................................... 7 2.3 Current Governorate-wide diver and snorkeler visitation and revenues.................. 8 2.4 How existing entrance/user fees are distributed..................................................... 9 2.5 Unintended impacts of the existing fee system .................................................... 11 2.6 Estimating the missing numbers (of divers and snorkelers, revenues).................. 13 2.7 Issues to be addressed in a fee expansion proposal .............................................. 15 3. Revenue Needs: RSMP Conservation Budget Projections ......................................... 18 3.1 Review of recent RSMP budgets.......................................................................... 18 3.2 Future RSMP budget scenarios ............................................................................ 18 3.3 Some key assumptions behind the future budget scenarios................................... 23 3.4 Anticipating growth (planned tourism development)............................................ 24 3.5 Target: $4M/year for RSMP, $10-12M including EPF & Governorate................. 24 4. Tourists’ Willingness to Pay ........................................................................................ 25 4.1 International experience with protected area/marine park entry fees..................... 25 Bunaken and Bonaire cases .............................................................................. 27 Palau case ........................................................................................................ 27 4.2 The Red Sea tourism sector seems willing to pay for conservation....................... 28 Key survey results............................................................................................ 28 Specific results from Sharm el Sheikh tourists.................................................. 28 Specific results from Hurghada tourists ............................................................ 29 Highlights from tourism operators.................................................................... 29 b 5. Preliminary Screening of Potential Funding Mechanisms ......................................... 30 5.1 Potential revenue mechanism types...................................................................... 30 5.2 Evaluation criteria................................................................................................ 31 A note on equity and transparency.................................................................... 31 5.3 Preliminary feasibility screening I: NON-entrance fee mechanisms .................... 32 Fine enforcement.............................................................................................. 32 Concession fees................................................................................................ 33 Permit fees ....................................................................................................... 33 Adoption programs (i.e., corporations) ............................................................. 33 Membership programs and donations (i.e., individuals).................................... 34 Product sales .................................................................................................... 34 Marina/jetty use fees ........................................................................................ 35 Mooring buoy use fees ..................................................................................... 35 Port mooring fees for cruise ships and yachts ................................................... 35 Fee for private use of RSMP infrastructure and services................................... 36 Boat licenses and inspection fees -- perhaps capped in number and tradable..... 36 5.4 Preliminary screening II: retail entrance fee mechanisms ..................................... 37 Simple expansion of existing entry fees to all protected reef sites..................... 37 Entry fees for land protectorates....................................................................... 39 Premium entry fees for special diving/snorkeling sites ..................................... 40 Hotel environmental fee ................................................................................... 40 Unified annual entry pass or stamp, implemented at Airport arrival or exit....... 42 5.5 Summary: most promising revenue mechanism options ....................................... 44 5.6 Legal questions.................................................................................................... 45 6. Potential Revenues from Most Promising Options..................................................... 47 6.1 Expansion of the area covered by RSMP daily fees.............................................. 48 6.2 Hotel environmental fee....................................................................................... 50 6.3 Unified annual environmental pass/fee................................................................. 51 6.4 Summary of revenue potentials............................................................................ 52 7. Conclusions and Recommendations ............................................................................ 55 8. References .................................................................................................................... 56 9. Annex A: Contractual Information............................................................................ 58 EEPP and PSU Background........................................................................................ 58 About the Authors ...................................................................................................... 59 Terms of Reference .................................................................................................... 60 Policy Measure 2.2 (Red Sea Finance) Workplan and Schedule.................................. 63 10. Annex B: Contacts...................................................................................................... 66 11. Annex C: Supporting Data Tables............................................................................. 68 c List of Figures and Tables Chapter 1: Figure 1. Satellite Image of Egyptian Red Sea & Southern Sinai/Gulfs ................................ 2 Chapter 2: Table 1. Recent RSMP Diver-days + Snorkeler-days (tickets sold) ...................................... 7 Table 2. Recent RSMP Revenues........................................................................................