KEENJHAR LAKE RESORT PROJECT - Sindh Enterprise Development ...
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KEENJHAR LAKE RESORT
PROJECT
Development of a Tourist Resort
Under Public Private Partnership
at
Keenjhar Lake, Thatta
Project Information Memorandum
Sindh Tourism PPP Unit
Department Finance Department
Advisors:
Ernst & Young Meinhardt (Pakistan)
Haidermota & Co.
Ford Rhodes Sidat Hyder Private LimitedTable of Contents
1 Disclaimer ............................................................................................................................... 5
2 Abbreviations ......................................................................................................................... 7
3 Introduction ............................................................................................................................ 8
4 The Tourism Industry ........................................................................................................... 9
4.1 International Tourism.................................................................................................... 9
4.2 Tourism in Pakistan .................................................................................................... 10
4.2.1 Estimates and Forecasts .................................................................................... 11
4.2.2 GNP Contribution ................................................................................................. 12
4.2.3 Inbound Tourist Traffic and Tourism Receipts .............................................. 12
4.2.4 Outbound Tourist Traffic and Expenditures ................................................... 13
4.2.5 Motivation .............................................................................................................. 13
4.2.6 Average Spending Levels .................................................................................. 14
4.2.7 Exports & Tourism Earnings ............................................................................. 14
4.2.8 Tourism and Employment .................................................................................. 14
4.2.9 Tourism and Regional Development ................................................................ 14
4.2.10 Domestic Tourism................................................................................................ 15
4.3 Tourism Attractions in Sindh .................................................................................... 15
4.3.1 Tourist Destinations ............................................................................................ 16
4.3.2 Eco-Tourism.......................................................................................................... 17
4.4 Tourist Sites under consideration for development ............................................. 17
4.5 Eco friendly Tourist Resort in Sindh ....................................................................... 19
5 Pakistan – Profile and Overview ...................................................................................... 21
5.1 Country Profile ............................................................................................................. 21
5.1.1 Overview ................................................................................................................ 21
5.1.2 Demographics ...................................................................................................... 21
5.1.3 General Macroeconomic Indicators ................................................................. 23
6 Province of Sindh – Profile and Overview...................................................................... 28
6.1 Province Profile ........................................................................................................... 28
6.2 Regional Connectivity ................................................................................................ 29
6.3 Demographic and Socio-economic Profile ............................................................. 31
7 Overview of Thatta and surrounding districts ............................................................... 32
7.1 Introduction to Districts surrounding Keenjhar .................................................... 32
7.2 Overview of Thatta and Badin District ..................................................................... 32
2
Keenjhar Lake Resort Project - Project Information Memorandum7.3 Hyderabad District....................................................................................................... 33
7.4 Karachi District ............................................................................................................ 33
7.5 Keenjhar Lake .............................................................................................................. 34
7.5.1 Proximity ............................................................................................................... 34
7.5.2 Socio-economic Conditions: Surrounding area ............................................ 34
7.5.3 Site Conditions: 100kms radius ........................................................................ 35
8 Project Overview ................................................................................................................. 36
8.1 Keenjhar Lake .............................................................................................................. 36
8.2 Project Concept ........................................................................................................... 37
8.3 Project Objectives ....................................................................................................... 38
8.4 Operating Model .......................................................................................................... 38
9 Development Framework ................................................................................................... 40
9.1 Site Analysis ................................................................................................................. 40
9.2 Conceptual Design ...................................................................................................... 41
9.3 Visualizations ............................................................................................................... 43
10 Conceptual Master Plan ................................................................................................. 44
10.1 Infrastructure Development ....................................................................................... 45
10.2 Development Package I .............................................................................................. 46
10.3 Development Package II ............................................................................................. 47
10.4 Synopsis of DP-I and DP-II......................................................................................... 48
11 Analysis on Commercial Viability ................................................................................ 49
11.1 Project aims and objectives ...................................................................................... 49
11.2 Tourism opportunities at Keenjhar Lake ................................................................ 49
11.3 Demand Generators .................................................................................................... 50
11.4 Survey of Recreational spots near Karachi............................................................ 52
12 Development Parameters .............................................................................................. 55
12.1 Development parameters ........................................................................................... 55
13 Project Development Strategy ...................................................................................... 58
13.1 Marketing strategy for Farmhouses ......................................................................... 58
14 Financial Analysis ........................................................................................................... 61
14.1 Project Cash Flows ..................................................................................................... 61
14.2 Development Period Cash Flows ............................................................................. 62
14.2.1 Estimated Project Costs – Resort Zone ...................................................................... 63
14.2.2 Project Development Timelines ................................................................................ 63
3
Keenjhar Lake Resort Project - Project Information Memorandum14.2.3 Development Outlays ............................................................................................... 64
14.2.4 Project Financing Assumptions ................................................................................. 64
14.3 Operational Period Cash Flows ................................................................................ 66
14.3.1 Revenue Assumptions............................................................................................... 67
14.3.2 Cost Assumptions ..................................................................................................... 68
14.4 Investment Analysis.......................................................................................................... 70
14.4.1 Upside Potential ....................................................................................................... 70
15 Project Implementation Framework ............................................................................. 71
15.1 Implementation Structure .......................................................................................... 71
15.2 Role of the Developer ................................................................................................. 71
15.3 Role of the Keenjhar Project Company ................................................................... 71
15.4 Concession Agreement .............................................................................................. 71
15.5 Concession Period ...................................................................................................... 72
15.6 Payment Security Mechanism................................................................................... 72
4
Keenjhar Lake Resort Project - Project Information Memorandum1 Disclaimer
This Information Memorandum (“the Memorandum” or “this Document”) has been compiled
by Ernst & Young Ford Rhodes Sidat Hyder (“Transaction Advisors”), on behalf of the
Tourism Department and the PPP Unit, Finance Department, Government of Sindh (“the
Client”), on the Keenjhar Lake Resort Project (“the Project”).
This Memorandum is confidential and is provided solely for the information of the recipients
(“the Recipients”) for providing preliminary information regarding the Project. While the
information contained herein is from sources believed to be reliable, it is not represented to be
accurate or complete and should not be relied upon as such. The information provided is on a
best efforts basis and neither the Transaction Advisors nor the Client have any obligation /
liability of any nature whatsoever relating to the gains and/or losses incurred by the
Recipients based on any information provided.
The information contained in this Memorandum is selective and does not include a description
of any risks. It does not purport to contain all the information that the Recipients may require
and is subject to updates, expansions, revisions and amendments. However, neither the
Client nor its Transaction Advisor, undertake any obligation to update, expand, revise or
amend any information or to correct any inaccuracies contained in this Memorandum or to
provide the Recipients with additional information at any time whatsoever.
Neither the Client, nor its Transaction Advisors, nor affiliated partnerships or bodies
corporate, nor the directors, shareholders, managers, partners, employees or agents of any of
them (“the Parties”), make any undertaking, representation or warranty, express or implied, as
to the accuracy, reasonableness or completeness of the information contained in this
Document. All such Parties expressly disclaim any and all liability for, or based on, or relating
to, any information/ errors/ omissions contained in the Memorandum, or based on or relating
to the Recipient’s use of the Memorandum. Furthermore, the Parties will not have any liability
to any of the Recipients or any other person under law, equity or contract, or otherwise for
any alleged loss, expense or damage of any nature whatsoever which may arise from or be
incurred or suffered in connection with anything contained in this Memorandum or from any
matter deemed to form part of the same.
This Memorandum is not a prospectus and does not constitute or form any part of any offer or
recommendation to invest in the Project nor shall it or any part of it form the basis of, or be
relied upon, in any way in connection with any contract relating to any contractual
arrangements that the Recipient may enter into with the Client or its designated/ nominated
entity (ies). Any interested party (including the Recipients) shall be deemed to acknowledge
that it has not relied on or been induced to enter such arrangements or agreement by any
representations or warranty set out herein or otherwise. The information provided in this
Document does not constitute a personal recommendation nor does it take into account the
particular investment objectives, financial situations and/or needs of individual Recipients.
The Recipients should read and consider all of the information contained in this Memorandum
and should conduct their own independent investigations and analysis in respect of the same.
The contents of this Memorandum are not to be construed as legal, financial, or tax advice.
Before acting on any advice or recommendation contained in this Document, the Recipients
should consider whether it is suitable for their particular circumstances and, are strongly
advised to seek professional advice. Each Recipient should consult his, her or its own legal
advisor, financial advisor and/or tax advisor for legal, financial or tax advice. The Recipients
are required to conduct their own due diligence and seek their own advice prior to making any
investment decision relating to the transaction and the Project.
5
Keenjhar Lake Resort Project - Project Information MemorandumThis Memorandum is for information only and is not an offer to enter into any kind of
transaction whatsoever. This Document (including its contents) is confidential, being for use
only by the persons to whom it is issued, and may not be used for any other purpose. This
Memorandum (or any part thereof), may not be copied, distributed, published, reproduced or
disclosed to any other person by the Recipients to third parties other than the Recipients’
professional advisers for the purpose of considering their interest in the Project and obtaining
advice in respect thereof. Additionally, the provision of this Document may be restricted by
law. This Memorandum is for distribution only to the persons of the kind to whom it may
lawfully be issued. Persons to whom this Memorandum is provided are required to inform
themselves about and to observe any such restrictions.
This Memorandum includes certain statements, estimates and projections with respect to the
anticipated future performance of the Project. These statements, estimates and projections
are based on a hypothetical business model envisaged by the Client and its Transaction
Advisors. Certain statements in this Memorandum constitute “forward-looking statements”. All
statements other than statements of historical facts included in this Memorandum including,
without limitation, financial position, business strategy, plans and objectives of management
or future operations (including development plans and objectives relating to products), are
forward-looking statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause actual results, performance
or achievements to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions based on anticipated business strategies of the
prospective investors/ developers/ consortia to the Project, including their subsidiaries, and
the environment in which the prospective investors/ developers/ consortia to the Project,
including their subsidiaries, will operate in the future. These forward-looking statements speak
only as at the date of this Memorandum. All such statements, estimates and projections
reflect various assumptions and best estimates made by the Client and its Transaction
Advisors concerning anticipated results, which assumptions or estimates may or may not
prove to be correct. There are no assurances whatsoever that such events as stated in the
estimates or projections will occur and the Client, Transaction Advisors and the Parties shall
not be liable or responsible to the Recipients in any manner whatsoever in respect of the
same.
This Memorandum has been delivered to interested and invited parties (including the
Recipients) for information only and upon the express understanding that such parties will use
it only for the purpose set out above. Furthermore, the Memorandum does not create an
obligation on the Client to consider any offer, and reserves the right, without prior notice and
without giving reasons, to reject any or all proposals and/or to negotiate with any prospective
bidder on any terms (and whether individually or simultaneously with any other prospective
bidder) with respect to the Project. The Client reserves the right, without advance notice, to
terminate the Expressions of Interest solicitation process at any time. The issue of this
Memorandum shall not be taken as any form of commitment on the part of the Client to
proceed with any transaction.
All inquiries and requests for further information in respect of this Memorandum must be in
writing, and directed to the Client. No verbal discussion with any staff or advisor of the Client
or the Transaction Advisors or the Parties, or any of their respective subsidiaries and/ or
affiliates, can change, add to or clarify any of the material contained in this Memorandum.
Recipients should only rely on written additions or clarifications issued by duly authorized
representatives of the Client. Email communications from authorized representatives of the
Client will be deemed as written communications.
6
Keenjhar Lake Resort Project - Project Information Memorandum2 Abbreviations
EOI Expression of Interest
RFP Request for Proposal
PPP Public Private Partnership
GoS Government of Sindh
PCP Population Census of Pakistan
KP Khyber Pakhtunkhwa [formerly North West Frontier Province (NWFP)]
CAGR Compounded Annual Growth Rate
PSLM Pakistan Social and Living Standard Measurement
GDP Gross Domestic Product
FY Financial Year
FDI Foreign Direct Investment
PKR Pakistani Rupee
US$ / USD United States Dollar
EDL External Debt and Liability
KSE Karachi Stock Exchange
b Billion
m Million
UNWTO United Nations World Tourism Organization
GNP Gross National Product
SBP State Bank of Pakistan
ADB Asian Development Bank
OPEC Organization of the Petroleum Exporting Countries
NH National Highway
KPAC Keerthar Protected Area Complex
FAR Floor Area Ratio
ID Infrastructure Development
DP-I Development Package I
DP-II Development Package II
O&M Operation and Maintenance
DHA Defence Housing Authority
WTTC World Travel & Tourism Council
T&T Travel and Tourism
km Kilometres
NW Northwest
N North
S South
SE South East
7
Keenjhar Lake Resort Project - Project Information Memorandum3 Introduction
With almost 180 million people, a growing middle income class, young and educated
population and consistently growing remittances from increasing number of Pakistanis
working abroad, tourism is an economic sector that holds tremendous potential in Pakistan.
Despite limited investment and government support in the past, the potential of the industry
can be estimated from the amounts being spent on tourism activities by Pakistani people and
businesses in and out of Pakistan.
Pakistan, with its diverse culture, historic treasures, and numerous natural endowments,
boasts of a variety that offers something for everyone to enjoy. It has all the elements of being
a tourist haven, offering a glimpse of the sub-continental culture, as well as a profound blend
of landscapes ranging from the costal beauty of the Arabian Sea in the South to the wondrous
mountain ranges in the North. From untamed deserts to the historic ruins of Mohenjo-Daro,
Harappa and Taxila, to the caves of Balochistan, and the Mughal architecture in Lahore,
Pakistan has a huge potential to become an attractive tourist destination for the world.
Pakistan is enriched with natural beauty and landscape, carrying strong potential to become
attractive tourist destination. In fact despite lack of infrastructure development (the “ID”) and
incentives to support this sector, tourism has developed well particularly in the northern parts
of Pakistan. Sindh, with its rich history and culture and its beautiful landscapes, from its
beaches and wetlands to its deserts, hills, farmlands, ports, archeological sites and its mega
city, Karachi (the commercial hub of Pakistan), has so far not been able to effectively develop
the tourism industry in the province.
The Tourism Department, Government of Sindh, (the “Tourism Department”) is now actively
looking at developing the tourism industry in Sindh to leverage off from the large industrial
and commercial base and the huge demand for leisure and recreation in the growing middle
and high income population of the province and of the country i.e. Pakistan. At the same time,
the Government of Sindh (the “GoS”) views the tourism industry to be sector that can provide
the economic stimulus to local economies in the hinterlands of the province by creating job
and business opportunities and improving the livelihoods of people in the hinterlands.
Expenditure on tourism induces a chain of transactions requiring supply of goods and
services from related sectors. The consumption demand emanating from tourist expenditure
also induces more employment and creates a multiplier effect on the economy. Tourism thus
has the potential to stimulate other economic sectors through its backward and forward
linkages across various sectors including agriculture, horticulture, handicraft, transport,
construction, etc.
The Tourism Department sees public private partnerships (the “PPP”) as the most efficient
and effective method for developing the tourism sector, whereby the private sector would
bring its operating models focusing on customer care and operating efficiencies. It is
envisaged that the GoS would act as the facilitator and regulator, providing infrastructure and
support services that complement the investments being made by the private sector and
monitoring service and maintenance standards.
8
Keenjhar Lake Resort Project - Project Information Memorandum4 The Tourism Industry
4.1 International Tourism
Tourism had been rising steadily internationally, especially in the Asia-Pacific region until
2008 when, following global economic meltdown, there was a fall in demand, with implications
for some of the region’s developing economies.
According to United Nations Economic and Social Commission for Asia and the Pacific (the
“UNESCAP”) the global growth in international tourist arrivals fell from 6.7% to 2.0% between
2007 and 2008, thus reflecting an extremely volatile and unfavorable global economy.
However, as the world comes out of recession, tourism growth is also likely to be modest in
the coming years.
Over the period 1995-2007, tourism around the globe continued to experience steady growth
of 4.2% per year, thus confirming its status as the world’s largest growth industry. Between
the years 2006 and 2007, international tourist arrivals increased by 6.7% to 900 million. All
regions of the world registered increases in tourist activity during such period with the Asia-
Pacific region leading the rankings with a 10.4% increase.
Between 1995 and 2007, the
Asia-Pacific region’s share of 60%
total arrivals increased from 50%
18.7% to 25.7%. Steady growth
Percentage Share
was also recorded in Africa: 40%
Over the same period, its share
30%
grew from 4.2 to 6.0%. North
America and Europe, on the 20%
other hand, despite increases
in their absolute number of 10%
tourist arrivals, saw their shares
0%
of the market decline as
depicted by the adjacent chart. 1995 2005 2007
Asia and the Pacific Africa
Between 1995 and 2007, the Europe Latin America and Carib.
Asia-Pacific region’s share of North America
Source: UNESCAP Statistical Yearbook for Asia and the Pacific 2009
total tourist arrivals increased
from 18.7% to 25.7%. Steady growth was also recorded in Africa over the same period – with
its share growing from 4.2 to 6.0%. However, North America and Europe, on the other hand,
despite increases in their absolute number of tourist arrivals, saw their shares of the market
decline. The aforementioned statistics relating to the global tourist arrivals in various regions
are depicted by the adjacent chart.
Within the Asia-Pacific region, the strongest performance was in the South and South-West
Asia sub region, with a hefty increase in tourist arrivals in 2007 of 14.4%. This growth was
sustained by the robust performances of Nepal (+37.2%), Turkey (+17.6%), India (+14.3%)
and Maldives (+12.3%). The South-East Asia sub region, which used to be the region’s
leader, became the second best performer with a 11.7% increase with major contributors
being Malaysia
The East and North East-Asia sub region, led the growth in tourist arrivals with an increase of
21.1% in 2007. China’s growth in arrivals (+9.6%) also contributed to the sub region’s
continuing high performance. Indeed, in recent years China has become a world tourism
leader – both inbound and outbound. Since 1995, tourist departures from China have grown
tenfold. Among the beneficiaries of China’s outbound travel growth were Japan with a 13.8%
increase of visitors in 2007 and Hong Kong with an 8.4% increase.
The North and Central Asia sub region also had a solid performance, averaging a 7.7%
annual growth in arrivals over the period 1995-2007. Kyrgyzstan, Kazakhstan and Azerbaijan
were major contributors to this growth.
The growth in arrivals has been accompanied by a large growth in income. Between 1995
and 2007 worldwide receipts from international tourism more than doubled to $1,028 billion.
9
Keenjhar Lake Resort Project - Project Information MemorandumAs in the previous years, Europe received almost half ($466.9billion) of world revenue, while
almost one quarter ($241.7 billion) went to Asia and the Pacific. Between 2000 and 2007, the
region increased its share of global tourism receipts from 19.1% to 23.5%, consolidating its
position as the second-highest tourism earner.
Tourism can have a huge economic impact as visitors spend money on accommodation, food
and drink, and local transportation. Within the Asia-Pacific region, several countries depend to
a substantial extent on tourism. The chart presented below illustrates tourism receipts as a
percentage of the Gross Domestic Product (the “GDP”) for certain selected countries for 1995
and 2007.
Kyrgyzstan
Malaysia
Hong Kong, China
Thailand
Singapore
Phillipines
Australia
Turkey
Bhutan
Srilanka
Indonesia
India
Pakistan 2007 1995
Bangladesh
0 2 4 6 8 10 12
Percentage
Source: UNESCAP Statistical Yearbook for Asia and the Pacific 2009
As per the United Nations World Tourism Organization (“the UNWTO”) the number of
international tourist arrivals worldwide reached 247 million between January 2009 and April
2009, down from 269 million compared to the same period in 2008, declining by 8%. Results
reflect the severe impact of the global economic crisis and all the associated causes and
effects, exacerbated in some regions by concerns about the outbreak of the influenza virus.
The UNWTO World Tourism Barometer 2009 has revised its previous forecast and expects
international tourism to decline by between -6% and -4%.
4.2 Tourism in Pakistan
Tourism has been a major social phenomenon of societies all along and is motivated by the
human desire for leisure, adventure and entertainment. The motivation for development of
tourism also includes social, religious and business interests. The importance of tourism as
an instrument for economic development and employment generation, particularly in remote
and backward areas has been recognized the world over. Tourism is one of the largest
service industries globally in terms of gross revenue as well as foreign exchange earnings.
Tourism is among the significant economic sectors in Pakistan that has huge potential to
achieve high growth rates if supported effectively by the government. Support from the
government can be in the form of providing infrastructure, utilities, services as well as other
incentives for private investor in the form of project support under PPP arrangements. It has
the capacity to capitalize on the success of the country in the services sector and provide
sustainable models for growth. It offers the potential to stimulate other economic sectors
through its backward and forward linkages across various sectors like agriculture, horticulture,
handicraft, transport, construction etc. Expenditure on tourism induces a chain of transactions
requiring supply of goods and services from related sectors. The consumption demand,
emanating from tourist expenditure also induces more employment and creates a multiplier
10
Keenjhar Lake Resort Project - Project Information Memorandumeffect on the economy. Consequently additional income and employment are generated
through such linkages.
Tourism industry is overwhelmingly represented by the private sector service providers while
public sector has a significant role to play in infrastructure areas either directly or through
other mediums such as PPP. Another important feature of the tourism industry with reference
to Pakistan is its contribution to national integration and preservation of natural as well as
cultural environment and enrichment of social profile.
4.2.1 Estimates and Forecasts
According to World Travel and Tourism Council (the “WTTC”), Pakistan is estimated to have a
Travel and Tourism (the “T&T”) demand of PKR 1,050b in 2010, less imported goods and
services including T&T spending abroad of PKR 264.5b, amounts to an overall T&T Economy
GDP of PKR 786.2b. Overall, the T&T sector supports 2.4 million jobs across Pakistan,
however direct industry GDP and employment is PKR 291b (equivalent to 2% of GDP) and
869,000 jobs (representing 1.6% of total employment) respectively.
The adjacent chart indicates the sectors comprising
T&T demand in 2010 for Pakistan as per the WTTC 3%
Report 2010 for Pakistan, which states the following: 8%
„ Contribution of T&T to the GDP is expected to
rise from 5.3% (PKR 786.2b) in 2010 to 5.5% 38%
(PKR 2,205.1b) by 2020;
„ Real GDP growth for T&T economy is expected
to be negative 3.7% in 2010, but would average 34%
5.8% per annum over the coming 10 years;
„ Export earnings from international visitors and
tourism goods are expected to generate 3.8% of
total exports (PKR 81.7b) in 2010, growing (on 3% 14%
nominal terms) to PKR 232.2b in 2020; and
„ T&T investment is estimated at PKR 356.9b, or Personal T&T Business T&T
13.8% of total investment in 2010. By 2020, this
is projected to reach PKR 1,036.0b or 13.3% of Government Expenditures Capital Investment
total investment. Visitors
Source: WTTCExports Other Exports
Report 2010 for Pakistan
THIS AREA IS INTENTIONALLY LEFT BLANK
11
Keenjhar Lake Resort Project - Project Information MemorandumThe table below illustrates the major indicators of tourism in Pakistan as forecasted by WTTC
Table: Major Tourism Indicators from 2010 – 2020 : Estimates and Forecasts
2010 2020
PKR % of Growth1 PKR % of Growth2
(billion) Total (%) (billion) Total (%)
Personal Travel & Tourism 395.0 3.4 10.4 1,386.9 4.4 8.2
Business Travel 151.2 1.0 (3.7) 433.8 1.1 6.0
Government Expenditures 30.9 2.0 2.0 86.7 2.1 5.8
Capital Investment 356.9 13.8 (6.6) 1,036.0 13.3 6.1
Visitor Exports 81.7 3.8 2.2 232.2 2.5 5.9
Other Exports 34.9 1.6 5.5 151.0 1.6 10.5
T&T Demand 1,050.7 5.8 1.0 3,326.8 6.5 7.1
Direct Industry GDP 290.6 2.0 (1.2) 792.3 2.0 5.5
T&T Economy GDP 786.2 5.3 (3.7) 2,205.1 5.5 5.8
Direct Industry Employment3 869.3 1.6 (1.3) 1,138.2 1.6 2.7
T&T Economy Employment3 2,400.4 4.3 (3.8) 3,235.5 4.4 3.0
1 2010 real growth adjusted for inflation (%);
2 2011-2020 annualized real growth adjusted for inflation (%); and
3 000 jobs
Source: World Travel and Tourism Council Report on Tourism in Pakistan 2010
4.2.2 GNP Contribution
Tourism Receipts (YOY)
18,000 60.0%
15,000 50.0%
40.0%
Receipts PKRmn
YOY %change
12,000
30.0%
9,000
20.0%
6,000
10.0%
3,000 0.0%
0 -10.0%
2002-03 2003-04 2004-05 2005-06 2006-07
Source: State Bank of Pakistan
Contributions from the tourism industry have remained at 0.2% of Gross National Product (the
“GNP”) during 2005-06. The GNP of Pakistan for the same period was PKR 5,285 billion, as
reported by the State Bank of Pakistan (the “SBP”), the exchange earnings for the same
period amounted to PKR 13.2 billion.
4.2.3 Inbound Tourist Traffic and Tourism Receipts
Inbound Tourist Traffic refers to the number of international tourists who stay at least one
night in a collective or private accommodation in the country visited. Same-day visitors are not
included. The data refer to the number of arrivals and not to the number of persons.
12
Keenjhar Lake Resort Project - Project Information MemorandumInternational tourism receipts are the receipts earned by a destination country from inbound
tourism resulting from expenditure made by visitors from abroad, on lodging, food and drinks,
fuel, transport in the country, entertainment, shopping, etc.
Long term trends of foreign tourist arrivals and tourism receipts of Pakistan reflect irregular
trends during the last decade as exhibited in the adjacent table.
Tourism Receipts
Tourist Arrivals in Receipts
Year as a percentage
"000s" (US$ Million)
of GDP
1995 378 582 0.7%
2000 557 Not available- Not available
2005 798 828 0.6%
2006 898 Not available Not available
2007 840 900 0.5%
Source: UNESCAP Statistical Yearbook for Asia and Pacific 2009
According to UNESCAP foreign tourist arrivals increased continually from 378,000 in 1995 up
to 898,000 in 2006. However, in 2007 tourist arrivals saw a slight decline when they went
down to 840,000. This was primarily on account of the decline in global tourism. During the
period, 1995 - 2007, tourist arrivals increased at a CAGR of approximately 7.5%. Tourism
receipts have also continued to increase throughout the period 1995-2007.
4.2.4 Outbound Tourist Traffic and Expenditures
Outbound Tourist Traffic refers 2,500 1.60
to the number of departures that
1.40
people make from their country 2,000
of usual residence to any other 1.20
country for any purpose other 1.00
USD Millions
1,500
Percentage
than a remunerated activity in 0.80
the country visited.
1,000 0.60
Outbound tourism expenditure
0.40
includes expenditures on 500
lodging, food and drinks, fuel, 0.20
transport in the country, 0 0.00
entertainment, shopping, etc. 1995 2005 2007
Outbound Tourism Expenditures (USD Millions) %age of GDP
Source: UNESCAP Statistical Yearbook for Asia
As the data in the table above illustrates there is a significant demand for outbound tourism in
Pakistan. Although a significant part of this is also attributable to religious tourism for
purposes of Haj and Umra, it is estimated that this should account for about half of the traffic,
which indicates a sizable component of T&T for business and leisure. This continues to grow
over the years, with expenditures exceeding nearly US$ 2b in 2007.
The statistics clearly indicate the ability of Pakistanis to spend money on trips abroad, be
these for business or leisure. It also indicates the potential for tourism industry in Pakistan, if
the country was not faced with lack of infrastructure to support the tourism industry, which
drives Pakistanis to travel abroad for tourism activities. It would also be unreasonable to
ignore the significant latent demand for tourism in segments that seek affordable leisure
activity. The cost of air travel certainly restricts, if not prohibits, people from taking recreational
trips out of the cities in Sindh’s urban centres, including Karachi.
4.2.5 Motivation
Using the western definition, motivational analysis of foreign tourists to Pakistan during 2006
is given in the following table.
13
Keenjhar Lake Resort Project - Project Information MemorandumMotivation for Foreign Tourists
The adjacent image illustrates that more
than half of foreign tourist arrivals in
0%
Pakistan were for family visit (56%),
5% 15% followed by business (21%),
3%
holiday/recreation (15%) and meetings/
conventions (3%) according to a T&T study
21% in 2007 by the Ministry of Tourism,
56%
Government of Pakistan. These four factors
of motivation combined, account for about
95% of the total arrivals. Very few tourists
Holiday/Recreation Business came to Pakistan for other reasons i.e.
Family Visit Meetings/Conventions religion, archaeological/historical sites,
Archaeology/Historical Sites Others sports, study and health.
Source: T&T study, Ministry of Tourism
4.2.6 Average Spending Levels
According to the data of SBP, average spending per foreign tourist increased by 25% from
US$ 232 in 2005 to US$ 290 in 2006. Similarly, spending per tourist per day also increased
by 24% from 9 US$ in 2005 to 12 US$ in 2006.
4.2.7 Exports & Tourism Earnings
Export receipts have grown at an annual rate of 15% between 2002 and 2006, while earnings
from tourism have increased at an annual rate of 19% over the same period. The place of
tourism in foreign exchange earnings improved in 2005-06 as compared to 2004-05 i.e. from
12th to 11th.
International travel receipts as a percentage of earnings from exports remained the same i e.
1.3% in 2005-06. Their share in the combined receipts of merchandise and service items also
remained the same i.e. 1% in 2005-06 as was in the previous year.
Tourism receipts were higher in all twelve months of the year 2006 as compared to the same
months of 2005, which resulted in an increase of 40% overall receipts during 2006.
4.2.8 Tourism and Employment
Tourism is labor intensive and provides an ideal mechanism for increasing employment in the
service sector. The principal employers in the tourism sector are hotels, restaurants and travel
agents / tour operators.
During 2005-06, there were 1,761 hotels with 41,146 rooms, 226 air conditioned restaurants
with seating capacity of 25,814 and 2,142 travel agents/ tour operators. Other tourism
services such as, airlines, road transport, souvenir shops etc. also provide employment to a
large number of people besides paying taxes, license & registration fee etc. to the public
exchequer. It is estimated that the hospitality industry and travel trade employed more than
600,000 people directly in 2005-06. However, as indicated above, the sector overall supports
2.4 million direct and indirect jobs across Pakistan, out of which 869,000 jobs are provided
under direct employment in the T&T sectors (representing 1.6% of total employment).
4.2.9 Tourism and Regional Development
Tourism, being a labor intensive industry creates more jobs and opportunities in the areas,
which are not suitable for industrial development. It helps in the redistribution of wealth in
remote areas and creates a range of job opportunities from highly qualified people to people
with low academic profile, such as waiters, cooks, housemaids and janitorial workers.
14
Keenjhar Lake Resort Project - Project Information MemorandumIt is estimated that more than half of total income earned by the people from tourism sector
came from backward districts, and/ or areas having certain tourist attractions. These areas
were mostly, Murree, Galliat, Northern Areas, Swat, Ziarat, Abbottabad, Kaghan, Naran, Azad
Kashmir and other smaller resort areas.
4.2.10 Domestic Tourism
Based on the findings of the Domestic
Composition of Domestic Tourists
Tourism Survey carried out by the
15% 20% Ministry of Tourism, Pakistan, it was
7% estimated that in all 43 million domestic
tourists travelled within the country
during 2006.
8%
19%
13%
Domestic tourism is mostly concentrated
18% among those below 40 years of age.
Most domestic tourists i.e. 31% fall in
the age group of 16-30 years, followed
Students Skilled agriculture and fishery workers by 25% between 31-40 years, 17% from
Housewives Sales workers
Businessmen Government officials
the age under 15 years and 41-50 years
Others each, and 10% in the age group of 51
years and above.
Source: Domestic Tourism Survey, Ministry of Tourism
As the above chart depicts, one-fifth of domestic tourists were students, followed by 19%
skilled/agriculture & fishery workers, 18% housewives (which most likely represents family
holidays), 13% sale/ service workers, 8% businessmen, 7% government officials and 15%
other categories.
Over half of the domestic tourists were motivated by social calls followed by recreation,
business and health. These four motivating factors, combined together, formed 85% of the
travel within Pakistan.
Domestic tourists usually use three types of accommodation; either a relative's house, or
hotels and/ or their own houses which combined together makes up for more than 94% of the
total accommodation used. More than three-quarters of the tourist preferred to stay with their
relatives while the use of hotel accommodation was 15% only. Nearly 90% of domestic
tourists travel by road, 9% by rail and 2% by air.
4.3 Tourism Attractions in Sindh
Sindh holds many tourist attractions, such as wildlife sanctuaries, beaches, lakes, historical
sites, tombs of several Sufi saints and shrines, etc. A few examples of the same are given
below:
► Wildlife protected areas at Keerthar National Park
► Hill stations at Gorakh Hill
► Tombs at Makli and Chaukandi and
► Shah Jehan Masjid
► Shrines at Sehwan Sharif
Due to its varied geography and long history, Sindh hosts numerous spots of interest, which
can be developed in to tourism spots. The districts of Thatta and Badin have popular eco-
tourism locations, including Keenjhar Lake and Keerthar National Park. There are a number
of places of cultural and religious significance, such as mosques, shrines and temples, as well
as ancient tombs and forts as well as remnants of ancient civilizations, scenic hill ranges,
unexplored forests and deserts.
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Keenjhar Lake Resort Project - Project Information Memorandum4.3.1 Tourist Destinations
Chaukundi Tombs: 27kms from Karachi
on the National Highway (“the NH”), on the
distant horizon one sees clusters of
unusual graves in the shape of stepped
pyramids. The distinguishing features of
these graves are the superb carving and
engraving of the slabs with various designs
of jewellery, floral patterns and even horses
and their riders. The adjacent picture
exhibits and illustration of the elaborate and
exquisite carvings and Islamic architecture
for which Chaukandi tombs are famous.
Makli Tombs: Approximately 101kms from
Karachi is the largest necropolis in the
world (Makli). The elegant use of beautifully engraved sandstone on the graves is a feature
unique to this site.
Shah Jehan’s Masjid: Shah
Jehan’s Masjid, situated on
Thatta’s outskirts, is
representative of Muslim
architecture. It was built in
1647 A.D. by the Mughal
Emperor Shah Jehan, and is
said to have the most
elaborate display of blue-and-
white tile work in the sub-
continent as can be seen in
the adjacent picture.
The Shah Jehan Mosque has
99 domes and is considered a
masterpiece of Mughal
architecture.
Indus Valley Civilization: The Indus Valley was home to the largest of the four ancient urban
civilizations of Egypt, Mesopotamia, South Asia and China. Most of its ruins, even its major
cities, remain to be excavated and the ancient Indus script has not been deciphered. Many
questions about the Indus people who created this highly complex culture remain
unanswered, but other aspects of their society can be answered through various types of
archaeological studies.
Discovered in 1922, Moenjodaro (in Sindh province) was once a metropolis of great
importance, forming part of the Indus Valley Civilization with Harappa (discovered in 1923 in
the southern Punjab), Kot Diji (Sindh) and recently discovered Mehrgarh (Balochistan).
Moenjodaro is considered as one of the most spectacular ancient cities of the World. It
hasmud and baked bricks’ buildings, an elaborate covered drainage system, a large state
granary, a spacious pillared hall, a College of Priests, a palace and a citadel. Harappa,
another major city of the Indus Valley Civilization, was surrounded by a massive brick wall
fortification. Its other features and plans of the city were similar to that of Moenjodaro. The Kot
Diji culture is marked by well-made pottery and houses built of mud-bricks and stone
foundations. Mehrgarh, the oldest Civilization (7,000 B.C), remains of which were found in the
district Kachhi of Balochistan recently, was the pioneer of the Indus Valley Civilization. The
evidence of crop cultivation, animal husbandry and human settlement has been found here.
The inhabitants of Mehrgarh were living in mud-brick houses and learned to make pottery
around 6,000 B.C.
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Keenjhar Lake Resort Project - Project Information Memorandum4.3.2 Eco-Tourism
Marine Turtles & Mangrove Forests: A
drive to the beaches of Hawks Bay and
Sandspit (near Karachi) is one of the
greatest sources of pleasure to a nature
lover. It provides a unique tour of the
shores of the Karachi coast where the
Green Turtle and Olive Ridley are found
during the nesting seasons. During
autumn, after the monsoons when the sea
is calmer, the visitors can sit quietly on the
beach on a moonlit night and watch the
turtles come up and repeat what they have
been doing for generations i.e. laying their
eggs and leaving them in the enclosing
warmth of the soft sand for the heat of the sun to incubate till young hatchlings, perfect
miniatures of the adult, emerge and scramble to the sea. Visitors in this area may also wish to
tour the Somiani Bay Mangrove Forest that is the breeding ground for fish and shrimps and
home to many resident and migratory birds.
Bird Watching, Keenjhar & Haleji Lakes: In the northeast of Karachi, forming the end of the
chain of the great lakes lie the beautiful fresh water lakes of Haleji and Keenjhar in the district
of Thatta. Some forty
thousand birds including over
70 species of waterfowl find
refuge here during the winter
months. These lakes can be
regarded as one of the most
important wintering areas for
waterfowls in Eurasia.
Flamingos, Pelicans, Purple
Gallinules, Ducks, Coots,
Herons, Pheasants, Tailed
Jacanas, are just some of the
birds that can be observed
here, undisturbed in their
natural habitat. Besides
providing an excellent opportunity for bird-watching, there are also tours of the surrounding
areas which allow for exploration of the historical monuments of Thatta and Chaukandi.
Thatta has the largest necropolis in the world with beautifully engraved sandstone on the
graves.
Indus River: Indus is one of the greatest rivers of the world. It originates high in the
mountains of Tibet and flows through Ladakh in Sindh before flowing into the Arabian Sea.
On its 3,200kms journey it passes through the great Himalayan and Karakoram ranges, the
fertile plains of the Punjab and the vast desert of Sindh. Near the great Nanga Parbat (8126
m), it forms the borderline between the Asian and Indian continental plates. The Indus is
blessed with a rich variety of wildlife throughout its journey. Among these are various resident
and migratory birds, mammals, reptiles and fish. The Indus Blind Dolphin is one of its most
famous inhabitants.
4.4 Tourist Sites under consideration for development
Keerthar Protected Area Complex (KPAC): Keerthar National Park is one of the largest
wildlife reserves in Sindh. The Keerthar Range forms the boundary between the Lower Indus
Plain (east) and southern Balochistan (west). It consists of a series of parallel rock hill ridges
rising from 4,000 ft (1,200 m) in the south to nearly 8,000 ft (2,500 m) in the north. Keerthar
National Park is Pakistan's second biggest National Park.
17
Keenjhar Lake Resort Project - Project Information MemorandumKeerthar is an area of outstanding beauty and wildlife which provides an important habitat for
a variety of mammals, birds and reptiles characteristic of the arid subtropics. Approximately
one third of the park
lies in the north of
Karachi district and
two thirds in the
south-west of Dadu
district. The park is
part of a 447,161
hectare protected
areas complex, being
contiguous with the
Mahal Kohistan
Wildlife Sanctuary
(70,577ha) to the
south and the Hab
Dam Wildlife
Sanctuary (27,219ha)
to the south-west.
There are two tourist centers in the Park managed by the Sind Wildlife Management Board,
namely Khar and Karchat. The centres offer cottage and dormitory accommodation and
guides are available. There are some 671kms of un-metalled roads within the park, most of
which are traversable only by a four-wheel drive vehicle.
Gorakh Hills: At an elevation of almost 6,000 ft, Gorakh Hill is 93kms away in the north west
of Dadu District along with (Khuzdar) Balochistan Border. It is the highest point of the
Keerthar Mountain Range in Sindh and a unique adventure point for nature lovers. In the
summer season, the temperature ranges between a maximum of 25°C during the day time to
5°C at night. Temperatures during winters are well below zero with occasional snow fall
making it the only region in the province of Sindh where it snows. Gorakh hills could serve as
a hill resort for the locals of Sindh and Balochistan as well as the international community.
There is an opportunity to
develop Gorakh Hills into a
well managed hill station. In
this regard, the GoS has
established Gorakh Hills
Development Authority
(GHDA) which has
developed a master plan for
the site and is in process of
making development plans
for the site. The Tourism
department is actively
looking to develop the
infrastructure and initial
development packages and
has appointed a team of
technical, financial and
legal consultants to assist
them in this task.
Buddhist Pilgrimage & Development of Buddhist Shrines: A study should be made on the
basis of a similar study undertaken taken by the Planning and Development Division of
Pakistan with the same title. Development projects for archaeological sites such as Mohenjo-
Daro should be undertaken in order to enhance tourism in Sindh. Further, Hindus and
Buddhists should also be kept in mind when undertaking these studies.
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Keenjhar Lake Resort Project - Project Information Memorandum4.5 Eco friendly Tourist Resort in Sindh
Sindh is rich in cultural heritage varying from religious sites in Sukkur, Thatta and the Sehwan
districts to the relics of ancient civilizations like Mohenjodaro and Rannikot Fort and is marked
by its diversity and its close ties to the great Indus Valley Civilization of the third millennium
B.C. Despite all this, efforts made to acknowledge the remarkable value of this cultural
heritage as a tool for understanding history, archaeology, as well as for the promotion of
tourism in the area, have been largely ineffective.
There are also a number of natural and man-made wetlands in Sindh that offer potential for
tourism. These wetlands can act as the base upon which the tourism industry can be
developed in Sindh and its history and culture celebrated with its people and shared with the
rest of the country and indeed the world.
In order to facilitate tourism, schemes are being developed for establishing world class tourist
facilities at selected wetlands on a PPP basis. The GoS intends to provide land on long term
lease at concessional rates to the private sector to develop supporting infrastructure for
tourism activities, while it provides links such as road access and other utilities in connection
to the development sites. The role of the GoS would be to facilitate the private sector in
developing and operating these facilities in an eco-sensitive manner.
GoS has identified Keenjhar Lake in Thatta District one of its first tourism projects to be
developed on a large scale. It plans to develop a carefully selected site at the lakeside as a
world-class eco-friendly tourist resort, with a large recreational area to add to its economic
viability. Key facts on the lake are summarized below:
► Keenjhar Lake (also known as Kalri Lake) is situated at a distance of 113 km from
Karachi, 70 Km from Hyderabad and approximately 20 km north and north east of Thatta
City.
► Keenjhar Lake is a Ramsar Site 1 . The Ramsar Convention applies on designated
wetlands of international importance whose conservation and preservation is supported
by “159 contracting parties” (countries).
1
The Convention on Wetlands (Ramsar, Iran, 1971) - called the "Ramsar Convention" - is an intergovernmental treaty that
embodies the commitments of its member countries to maintain the ecological character of wetlands of international importance
and work towards the “wise use” of these wetlands through national land-use planning, appropriate policies and legislation,
19
Keenjhar Lake Resort Project - Project Information Memorandum► The National Highway (N-5) passes very close to the Keenjhar Lake while Jhimpir
Railway Station, the first station after Karachi is also located in close proximity.
► Keenjhar is the largest freshwater lake in Pakistan spread over an area of 145 sq km
with an irregular shoreline of 192 km. The maximum depth of the lake is 8 meters.
► The lake is an important source of drinking water for Karachi and supports major fishery.
► A variety of breeding, passage and water birds make their way here in winter. The lake
also has a rich flora of submerged, floating and emergent aquatic plants.
► Lack of overall infrastructure and control over exploitation of the lake resources is leading
to the loss of environment and deterioration of the natural habitat around the lake.
The overriding objective of the Project is to create an eco friendly tourist destination which
would provide high quality business and recreational facilities, supported by infrastructure and
amenities within a secure and wholesome environment that encourage extended stay at the
site. The GoS also intends to develop infrastructure and facilities to further facilitate
commuting to the lake.
Plans are also under way to plan and develop the Thatta city and district area to meet the gap
in infrastructure, utilities and services that has eluded many small urban cities and towns in
interior Sindh. This is not only expected to improve the quality of lives of people who are
resident there, but also enable the city to support tourism activities and furthermore it would
add to the value of projects at Keenjhar Lake.
management actions, public education and international cooperation regarding development projects and conservation of site
species
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Keenjhar Lake Resort Project - Project Information Memorandum5 Pakistan – Profile and Overview
5.1 Country Profile
5.1.1 Overview
Pakistan is the 6th largest country of the world with a population estimated at 180 million
according to the Population Census of Pakistan – September 2009. It lies between 23°35’ to
37°05’ north latitude and 60°50’ to 77°50’ east longitude, touching the Hindu Kush Mountains
in the north and extending to the Arabian Sea. Pakistan is bounded by Iran in the west,
Afghanistan in the north-west, India in the east and south-east with Arabian Sea in the south.
It shares a common border with China alongside Gilgit and Baltistan in the northern part. It
covers 796,096 sq kms and is divided into four provinces namely: Sindh, Punjab, Khyber
Pakhtunkhwa (KP) [formerly known as North West Frontier Province (NWFP)] and
Baluchistan.
Climatically, Pakistan enjoys a
considerable measure of variety where its
north and north western areas are
extremely cold in the winter while the
summer months, from April to September,
are pleasant. The coastal strip in the south
normally has a moderate climate. The
Indus Valley plains are extremely hot in
the summer with cold and dry weather
during the winters. Monsoonal rains fall
late during the summers. Due to the
rainfall and high diurnal range of
temperatures, humidity is comparatively
low.
The country has an agricultural economy
with a network of canals irrigating a major
part of its cultivated land producing major
crops such as wheat, cotton, rice, millet
and sugar cane.. The main natural
resources comprise natural gas, salt, coal
and iron whereas cotton, textiles, sugar,
cement and chemicals also tender an
important role in the economy of Pakistan.
Pakistan is an Islamic country where 97% of the population is Muslim and the remaining 3%
comprise Christians, Hindus, Zoroastrians and others.
English is the official language while Urdu, used as a medium of understanding throughout
the country, is the national language. According to the Summer Institute of Linguistics, a total
of 72 languages are spoken all over Pakistan.
5.1.2 Demographics
► Population Reference Bureau, figures for mid 2009 classify Pakistan as the sixth most
populous country in the world. Population grew during 1972 to 2009 at a compounded
annual growth rate (“the CAGR”) of 2.3%. The country’s population is estimated to double
by the year 2045 if it grows at 1.8% per annum.
► The population density has increased to 209 persons per sq. km. in 2009, from 42.5
persons per sq km in 1951 which is almost a fivefold increase. A large percentage of the
urban population of Pakistan is centred in three major urban agglomerations: Karachi,
Lahore and Faisalabad.
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