SANParks 2010 State of Readiness briefing to the Portfolio Committee on Tourism 15 September 2009

Background State of infrastructure Maintenance requirements 2010 strategy State of readiness Conclusion Questions Agenda

SANParks infrastructure plant estimated at R5.8 billion –Initiative to secure funds in 2005 Ageing tourism infrastructure –Majority of facilities constructed in 1930’s-1970’s Staff accommodation unacceptable due to past practices –Dormitories & shared ablutions Successful park expansion programme – critical infrastructure needs –400,000ha added over past 10 years to estate Estimate of R1,3 billion needed over 6 year period –Infrastructure Development Programme (IDP) started April 2006 R582 million allocation over 4 year period ending March 2010 Upgrade existing infrastructure Ratio of 40:60 income generating vs support infrastructure Provision of strategic new infrastructure Enabled SANParks to participate in 2010 event because of these pro-active upgrades Budget allocation was not prioritised for 2010 specific requirements –Progress 29% of staff accommodation upgraded 25% of tourism accommodation upgraded All except 3 projects will be completed by March 2010 Background

Baseline done for buildings & roads in 2008 Fences & bulk services infrastructure not evaluated Specific report on fences Current state of infrastructure –Buildings: 6,786 units 71% weighted average condition - rated as GOOD –Roads network (tourist routes): Consists of 3,053km unpaved (dirt/gravel) roads and 1,170km paved roads = 4,223km 58% weighted average condition - rated as FAIR Major upgrade & replacement needs (NOT maintenance): –R621 million backlog to attain standard for all roads (60% of unpaved roads are dirt/earth) –R273 million to replace and install new fencing –R360 million to upgrade remaining 1,500 staff units & construct 60 new houses –R200 mil to upgrade existing tourism units New infrastructure –Successful park expansion – require basic infrastructure (staff accommodation, fences, offices) –New strategic initiatives –New income generating opportunities State of Infrastructure

Maintenance requirements Replacement values (SoPIMR) ItemParks (R '000)KNP (R '000)Total Value (R '000) BuildingsR 1,304,100R 1,578,900R 2,883,000 RoadsR 682,100R 1,901,900R 2,584,000 FencesR 322,300R 94,950R 417,250 Total R 2,308,500R 3,575,750R 5,884,250 Maintenance benchmarks ItemParks (R '000)KNP (R '000)Total Amount (R '000) of replacement valueR 29,994R 36,314R 66,308 Roads excl. structural rebuild & upgradesR 22,280R 44,820R 67, % of replacement valueR 7,413R 2,184R 9,597 Total - ideal annual maintenance budgetR 59,687R 83,318R 143,005 Maintenance budget: 2009/10 ItemParks (R '000)KNP (R '000)Total Amount (R '000) Current annual budgetR 29,799R 23,963R 53,762 ShortfallR 29,888R 59,355R 89,243

SANParks 2010 Strategy Sustainable Infrastructure Development –Initiatives Develop accommodation as per Infrastructure Development Plan (IDP) Implement tented product over event period to be used for Kids in Parks, Honorary Rangers and “Green” low impact product post the event –Progress IDP new accommodation developed Proof of concept developed & concept communicated to MATCH tour operators. Funding models currently considered –Way forward Continue IDP implementation Decide whether or not to develop “Green” / sustainable tented product that will be available for booking during the event (CAPEX required) –Challenges Shortfall of budget (despite major progress made in terms of ageing infrastructure) Finding budget to implement “Green” product

SANParks 2010 Strategy (Cont) Optimal Occupancies in Parks (over event period) –Initiatives Approximately 30% of inventory (across many National Parks) was contracted to MATCH (FIFA appointed body for IT systems, marketing and ticket sales). Currently in sales phase through MATCH –At average of 5 night stay in KNP and 2 day stay in other parks an additional 17,500 visitors to be introduced to the parks and conservation Rest of inventory (70%) opened for direct bookings on 1 July –Progress High demand for SANParks product. Demand justified that the Nelspruit area become a MATCHville (MATCH also arranges logistics for the MATCHville’s as opposed to other accommodation establishments). Kruger National Park makes up 60% of this MATCHville and creates other opportunities Over 90% of the rest of available accommodation inventory is sold out –Way forward Work closely with MATCH to optimise opportunities Meetings conducted with Transport Operator to optimise opportunities during the event –Challenges Uncertainty and unpredictability due to final draw only happening in December 2009.

Retain committed client base –Initiatives 70% of inventory sold through traditional reservation channels. Minor changes were made to address the entire period spanning the 2010 Soccer World Cup, i.e. opening reservations earlier to inform management on demand –Progress Demand is high (in line with other years and hence no Plan B is required) Thorough communication with the general public happened through the press, web sites, and SMS –Way forward Continuous communication to keep the general public informed –Challenges Communication to general public and keeping the media informed SANParks 2010 Strategy (Cont)

Optimise Marketing Opportunity and Brand Building –Initiatives Kuduzela product launched in partnership with FNB Together with MATCH we’ve developed dedicated brochures on National Parks to be used by appointed tour operators –Progress The Kuduzela was launched on 14 July As per the FNB media coverage report SANParks received editorial coverage on their brand in extent of R3.4 million Brochures on the South African National Parks and accommodation offerings were developed and handed out to 45 tour operators representing the following countries: Argentina, Australia, Belgium, Brazil, China, Chile, Colombia, Costa Rica, France, Germany, Japan, Mexico, Netherlands, Russian Federation, South Africa, Sweden, United Kingdom and the USA. –Way forward Various initiatives are pursued as part of the opportunities that arise directly because of the event –Challenges Budget for renovations and internal refurbishment (softs) of dedicated units to optimally showcase the National Parks product – estimated shortfall: R9 million Choosing optimal solution in the vibrant market SANParks 2010 Strategy (cont)

Work closely with MATCH to optimise opportunity. Value of contract with MATCH for all National Parks at 100% occupancy over the event period equates to R85 million Task Team and Communication Strategy compiled Camps not dedicated to MATCH in the Kruger National Park –Virtually fully booked –Minimal changes required to be ready Camps dedicated to MATCH in KNP and inventory contracted in other parks –Task team accountable for implementation of the following areas: State of readiness  Safety and Security  Reservations  Transport and Logistics  Activities  Entertainment Areas  Sponsorships  Legal Support  Concession liaison  Catering  Accommodation  Communication  Marketing  Human Resources  Day visitor management  Technical  Finances  Procurement  Community Liaison  Forex and financial issues  Infrastructure development  Wild card  Park management liaison  Emergency services and disaster management  System administration

Conclusion IDP programme enabled SANParks to actively participate in the 2010 event and to contribute to the uniqueness and success of the event IDP funds were not planned / allocated / dedicated to the 2010 Soccer World Cup event – a wider view was taken to position SANParks for beyond 2010 The strategy adopted over the World Cup event period was to not neglect the loyal customers. –SANParks has annual average occupancies of over 70% - over the World Cup event period (June/July) SANParks experiences annual occupancies of over 80%. –As a result of the extended June/July school holidays (34% longer), inventory in extent of 30% could be contracted without sacrificing this established market SANParks is ready and well positioned to: –Capitalise on opportunities from the event –Increase market share by introducing a new customer base to the parks –Showcase conservation during the event The budget shortfall will not hamper initiatives from SANParks to play an integral role in hosting a successful Soccer World Cup SANParks is considering ways of addressing the gap between its budget affordability and the maintenance expenditure benchmarks for its entire infrastructure beyond 2010.

QUESTIONS