Final Report - Asian Development Bank

10
TA 4721-PRC: Preparing the Shaanxi-Qinling Mountains Integrated Ecosystem Management Project
Final Report Appendix 7
commitment to the PPTA Team in this regard – and this commitment will need to be part of the
Loan Assurances.
43.
44. In completing detailed design, the QBG should explore other avenues to add to the revenues
generated by projected attendance numbers. Three revenue sources not in the current design, that
could generate additional revenues at minimal capital cost, are: (i) establishing a small gift shop in the
reception center that sells books, handicrafts and other gifts that are strongly associated with the
Qinling; (ii) renting audio devices to visitors (similar to the Forbidden City) that can be used by visitors
while walking around the site, including to the restored Daoist temples; and (iii) guided tours of the
biodiversity areas in the hill zone and of the walks to the restored temples. If attendance is lower in
the early years, small additions to revenues in the areas of 10-20% could mean the difference
between financial viability/loan repayment and financial difficulties in the first years after start-up.
45. Sales of audio devices and guided tours – as well as repeat visitation and higher visitation
from domestic and international tourists with a strong interest in the Qinling -- would be promoted by
an international standard, state-of-the-art information and interpretation center in the reception center
in the multi-functional building. There is a strong educational mandate for the QBG in the current FSR
document, but the capital and operating costs of delivering on such a mandate through a world-class
interpretation center are not evident in the project cost estimates provided to the PPTA Team.
46. Finally, the QBG and its Design Team assumes that the QBG will operate and therefore
generate revenues only 240 days a year, likely for the eight month period from the middle of March to
the middle of November. In contrast, the three tourism facilities in Louguantai Zone B will be
essentially year round operations for 360 days in a year. The QBG likely needs a longer period of
time for maintenance and taking care of the gardens for the next tourist season, but should still
explore whether additional days could be added to their schedule perhaps particularly around the time
of Spring Festival through the first half of March. This could add 30-40 days to the QBG’s operating
period.
47. With greater emphasis on the natural scenery, interpretation, education and QM culture and
history, the QBG could be able to operate profitability for this 30-40 day period with reduced staff and
perhaps reduced entry fees and other prices. Joint marketing with the other ex-situ tourism
enterprises that emphasize the lower off-season prices for the QBG and the special characteristics of
the QM and the sites in the late winter and early spring period through to mid- to late-March could
generate quite substantial attendance from local residents and early tourists to Xi’an who are
attempting to miss the crowds of the later Spring months.
c. Implementation Arrangements
48. The investment will be implemented by the Qinling Botanic Garden division of the newly
formed QNBG. QBG is currently a government affairs unit set up by the Shaanxi Provincial
Government in 2001 and a legal entity defined within the scope the Civil Act of PRC. QBG is
registered as an independent legal entity to manage the establishment of the botanic garden and is
also referred to the Qinling Flora Research Institute. As a government unit, QGB operates under the
supervision of the Provincial Forestry Bureau.
49. The existing mandate is not clearly defined as there is no government document that clearly
defines the mandate of QBG. The legal entity registration certificate defines the following mandates:
“Conduct activities of research, protection and exhibition of biodiversity, maintain ecology balance and
achieve sustainable development”. It can operate in: research and development of bio materials,
biodiversity conservation and exhibition, publicity of laws and regulations related to protection of wild
life, flora and environment, scientific knowledge extension and education, training, eco-tourism,
landscaping design and implementation, entrust service. It has an initial capital of RMB 2.36 million.
As a government affairs unit, the provincial government only meets part of its operational cost.
Therefore QBG has to cover shortfalls in its’ operational cost by applying for funds from other
government projects or commercial activities. The government allows this type of unit to set up a
company or joint-venture to conduct commercial activities, but it has to get approval from DOF. QBG
can also raise loans for its own establishment and repay the loan using their own revenue generated.