Pr oj ec t

Government of Pakistan Ministry of Investment & Board of Investment

Pr of

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TOURISM

Government of Pakistan Ministry of Investment & Board of Investment

CONTENTS

CONTENTS

MOUNTAIN AIR SAFARI ............................................................................................. 03

SIKH PILGRIMAGE & TOURISM .............................................................................. 05

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MOUNTAIN AIR SAFARI

INTRODUCTION
Pakistan is a land of many splendours. The landscape changes from high mountain ranges i.e. the Himalayas, Karakoram and Hindu Kush, to Potohar and Balochistan plateaus, Sind and Punjab plains, and onwards to the Arabian Sea. On the northeast and northwest, Pakistan has high mountain ranges. There are over 43 giant peaks, each above 7,500 meters high. In total, there are 181 mountain peaks that are higher than 7,000 meters, some of which have not even been named as yet. The highest peak in Pakistan is the Mount K-2 (Goodwin Austin). Out of the world's fourteen highest peaks, thirteen are shared by Pakistan and Nepal. These mountains provide a wide choice to mountaineers and adventurers. Most of the passes through these mountains remain ice-covered almost throughout the year. These include the Babusar Pass and Khunjrab Pass. Some of these passes are more than 5,500 meters above sea level. The Karakoram Highway, which has been constructed on the ancient silk route between China and Pakistan, is the highest trade route in the World. Vast glaciers, large lakes and green valleys abound in the area and several enchanting tourist resorts have sprung up. These valleys include Gilgit, Hunza, Skardu, Chitral, Dir, Kaghan and Swat. The southern slopes of the mountains are covered with thick forests of junipers, pines, deodar, poplar and willows. Some of the glaciers like Siachen (72 km), Hispar (61 km.), Biafo (60 km.), Baltoro (60 km.), Batura (64 km.), Yenguta (35 km.), Chiantar (34 km.) and Trich (29 km.) are the largest snow masses outside the polar region.

MARKET / NEED ASSESSMENT

Pakistan last year (2006) achieved record growth in tourist arrivals from all major tourist generating markets. Efforts of the Government of Pakistan and Ministry of Tourism to promote Pakistan as an important tourist destination, has helped surpass tourist arrivals target of 615,000 for the year 2005 set by the WTO/UNDP in Tourism Development Master Plan. If this trend continues the tourist arrival target of 720,000 set for the year 2010 by the international development agencies, is likely to be achieved much before time. Tourism is the main foreign exchange earner of Nepal. In Nepal there are six airlines operating seventeen air safaris that leave Khatmandu for the Himalayas each morning. Compared to Nepal, Pakistan has a lot more to offer to the international (and domestic) adventure tourists but currently PIA is operating only one weekly air safari to the mountains and the private sector has not yet ventured into this lucrative activity. The existing PIA Air safari is a round trip from Islamabad to Skardu and back flying over and around the mountains. This doesn't satisfy the craving of the adventure tourist who is not thrilled by only flying around the mountains in a plane - the entire experience finishing in about 90 minutes. This round trip package of 90 minutes is difficult to sell to foreign tourist groups because a tourist group cannot come all the way to Pakistan simply for these 90 minutes. The adventure tourist wants to see the hundreds of mountain peaks through the aeroplane window and then enjoy the enchanting places, lakes and valleys of the Northern Areas of Pakistan through jeep safaris, hiking and/or trekking, with the real serious adventurers going for 3

mountaineering. The ideal package which can be marketed in the international market would, therefore, be a combination of air safari (to and from Skardu) combined with tourism itineraries covering different periods: short term (7 days), medium term (15 days) or longer durations providing the choice of duration, adventure and destination. The air safari from Islamabad to Skardu and back will continue as it will be very practical for foreigners who may be staying or working in Pakistan and also for the busy executives who cannot be away from their work for more than a couple of days. In addition, the existing PIA Mountain Safari needs to be promoted to domestic tourists more aggressively school and college students, family groups, business executives, etc.

PROPOSED PROJECT
The proposed mountain air safari will provide the tourists with their closest view of nature's grandest sculpted work of art the Nanga Parbat, K-2, Broad Peak, Rakaposhi, Concordia, Trango Towers, and huge glaciers such as Baltoro. Taking off from Islamabad, the plane will fly over the beautiful Swat, Chitral, Kaghan, Naran, Gilgit and Hunza valleys before landing at Skardu. The route will be traversed back on the return flight from Skardu to Islamabad. The air safari from Islamabad to Skardu (as also the return safari) will be of seventy five minutes. For adventure tourists, this mountain safari will be complemented by tourism itineraries of different periods: short term (7 days), medium term (15 days) or longer durations providing the choice of duration, adventure and destination.

FINANCIAL EVALUATION
This is a unique project where the existing assets and strengths of the airlines and tour operators will be used to produce a synergetic effect on the foreign exchange position of the country with the aim of bringing Pakistan in the limelight as a preferred tourist destination. The cost of aircraft (either in shape of depreciation or in shape of lease money) is included in the per hour flying cost. Similarly heavy capital investments are not envisaged by the Tour Operators, however, they will be required to improve their camping, trekking and other tools and transport equipment. The overall capital investment of the Tour Operators has been taken at Rs. 50 million for the purposes of this pre-feasibility. The hotels, restaurants and camping sites are available and they may require new investment. The cash flow of established tour operators depends on advances for tours from their customers. They will, however, need an additional working capital of about Rs. 10 million. On the basis of five year financial projections based on conservative estimates, the project is feasible and will provide an IRR of over 30% for the tour operators.

SIKH PILGRIMAGE & TOURISM

INTRODUCTION
South Asia pocketed US$ 5.4 billion from 5 million tourists, that is approximately 1% of the global tourism market in terms of revenue and 5% in terms of tourist arrivals. India is the biggest tourist attraction in South Asia currently attracting 44% of the South Asia tourist share followed by Iran which attracts 22% of the visitors. Pakistan is on the third place attracting 10% i.e. 500,000 of the total South Asian market and earning US$ 135 million. Pakistan is an insignificant player on the stage of world tourism. Although it possesses diverse and precious tourism assets that range from the coastal zone along Arabian Sea to the hill stations in the north of country, it has yet to make a mark on the international tourism market.

MARKET / NEED ASSESSMENT

Sikh pilgrims come to Pakistan for visiting the holy shrines and to celebrate the religious festivals as the most sacred and historically important Sikh shrines are situated in Pakistan. The current Sikh religious pilgrimage market can be divided into three distinct segments. 1. Pakistani / local pilgrims; 2. Indian pilgrims; and 3. Pilgrims coming from Europe, Canada, America and Middle East. During 2005, almost 35,000 Sikh pilgrims, from all over the world, visited Pakistan. Sikh Pilgrims visit Pakistan and their sacred places and for various festivals including Baisakhi festival, Martyrdom of Baba Guru Arjun Dev Mar, Death Anniversary of Maharaja Ranjit and Birth Anniversary of Baba Guru Nanak. Sikhs visit frequently on these occasions because these are important festivals. It is apparent that they visit in large numbers mainly on Birth Anniversary of Baba Guru Nanak and Baisakhi festival. Presently there are more than 150 Gurdwaras in Pakistan which are open to local Sikhs while the foreign visitors are only allowed to visit the Gurdwaras situated in Hassan Abdal, Nankana Sahib, Kartarpur, Eimenabad and Lahore. Nankana Sahib, Farooqabad, Hassan Abdal, Narowal, Eimenabad and Lahore are visited most frequently by the pilgrims as the major festivals and Gurpurbs are held in these Gurdwaras. Each city and location has its unique situation and dynamics. Currently the foreign Sikh pilgrims are contributing approximately Rs. 180 million per year or US$ 3.0 million. If the local pilgrims are added, the number will reach approximately US$ 6 million. In five years time it is estimated that this market will increase to US$ 22 million.

PROPOSED PROJECT
The following table suggests a portfolio of projects that need to be initiated. The interventions / projects do not relate to a single sector rather these are the facilities that are required by the pilgrims and different categories of investors will be investing in these projects. The investors include public sector, private sector and some of the investments are envisaged to be initiated through the publicprivate partnership. 5

S. N. Description 1 Roads Feroze Wattoowan to Nankana Sahib 48 kms improvement and widening of the road

Governance and Management Structure Public Sector

Incentives/ Support from public sector

Total Investment Investment Recovery -- PKR Provincial 57,600,000 Toll tax Rs.10 Government per vehicle Executing Agency Sign board rent Rs.10 per SQ.FT. P.M. Provincial Government 2,400,000 Toll tax Rs.10 per vehicle Sign board rent Rs.10 per SQ.FT. P.M. Provincial Government 5,500,000 Toll tax Rs.10 per vehicle Sign board rent Rs.10 per SQ.FT. P.M.

Farooqabad to Sacha Public Sector Sauda -2 kms improvement and widening of the road

Road from Hassan Public sector Abdal city to the hillock of Baba Wali Qandhari - 2 kms construction of a jeep able road and erection of electric poles for beautification Road access to Gurdwara Chakki Sahib 2 Library At Nankana Sahib At Hassan Abdal Public Sector

Provincial Government Provision of land by ETPB Provision of books and journals Provision of computers District Government

4,500,000

Public sector / Community participation institutionalized through local schools

3,190,000 Community shall be mobilized to cooperate for the establishment of a library which may be leased to some professional in private sector

3 Hospital At Nankana Sahib 50 beds 4 Public Park At Nankana Sahib At Hassan Abdal At Eimenabad

Public Sector

Provincial 15,000,000 PSDP Fund Government Land to be provided by ETPB After 3,200,000 construction of park, joy rides 3,200,000 and a play land area may be 3,200,000 leased out to private investors to increase revenue generation 800,000

Public Sector

TMA TMA TMA

5 Tree plantation

Public Sector

TMA

S. N. Description 6 Publishing of books on history of Sikhs 7 Mosque at hillock of Baba Wali Shah Qandhari - Hassan Abdal 8 Media campaign

Governance and Management Structure Public Sector

Incentives/ Support from public sector

Executing Agency Ministry of Tourism Local Government

Total Investment Investment Recovery -- PKR 1,200,000 Cost to be covered by advertisement 5,500,000

Public Sector

Public sector

PTV / Pakistani Missions abroad ETPB / PSGPC Ministry of Railways Security Showground Training to local artisans on production, marketing and value addition techniques Development of outlets Agreement to purchase total production Micro credit Supply of raw materials Supply of machinery and equipment on loan recoverable in easy installments. TMA Private Investor / Punjab Small Industries Corporation

20,500,000 Cost to be covered by advertisement 3,500,000

9 Renovation of Gurdwara Chakki Sahib 10 Uplifting the railway station - Nankana Sahib 11 Cultural shows / events 12 Handicraft shops

Public Sector

Public Sector

6,200,000

Public - Private Partnership Public - Private Partnership

800,000 Leasing to per event private sector 2,500,000

S. N. Description 13 Documentary films

Incentives/ Governance and Executing Support from Management Agency public sector Structure Public - Private The government PTV / Partnership Private shall disseminate the channels documentary film through its resident missions abroad and air it on the TV channels The government Ministry in collaboration of Tourism with private sector shall initiate capacity building programs and information dissemination for informal sector Private Sector Private Investor Private Investor Land to be provided by ETPB on lease Concessionary loans Tax exemption for a certain period Exclusivity rights Private Investor

Total Investment Investment Recovery -- PKR 2,650,000 Through advertisement

14 Capacity building programs for informal sector

15 Bus / Transportation Company at Nankana Sahib 16 Restaurants at Nankana Sahib 17 Hotel - Four Star, 60 room at Hassan Abdal

43,600,000

Private Sector

5,530,000 90,000,000

18 Hotel - Four Star, 60 room at Nankana Sahib

-do-

Private Investor

79,000,000

CONCLUSION
There is a large potential in increasing both revenue as well as employment opportunities by promoting Sikh Pilgrimage to various important Shrines in Pakistan, mostly in Punjab.

Government of Pakistan Ministry of Investment & Board of Investment

Head Office Ministry of Investment & Board of Investment Attaturk Avenue, G-5/1, Islamabad. Tel: (92-51) 9204339, 9207031, Fax: (92-51) 9207030,9218325 Email:mail@pakboi.gov.pk Regional Office (Karachi) Ministry of Investment & Board of Investment Kandawala Building, M.A Jinnah Road, Karachi - Pakistan Tel:(021) 9215069, Fax: (021) 9215078 Email:boikarachi@pakboi.gov.pk Regional Office (Lahore) Ministry of Investment & Board of Investment 136-B, New Muslim Town, Lahore Tel: (92-42) 5843602 Fax: (92-42) 5843603 E-mail:zali@pakboi.gov.pk Regional Office (Peshawar) Ministry of Investment & Board of Investment Sarhad Chamber House, 2nd Floor, G.T. Road, Peshawar Tel: (92-91) 9212743, 9212745 Fax: (92-91) 9212751 E-mail: boipeshawar@pakboi.gov.pk Regional Office (Quetta) Ministry of Investment & Board of Investment House 382/B, Hali Road, Quetta. Tel: 081-9203796, Fax: 081-9203818