ICT rectifies flaws in Papagayo
Comptroller’s Office detected weaknesses in the administrative management of this tourism development.
The executive president of the Costa Rica Tourism Institute (ICT) Carlos Ricardo Benavides has two big concerns weighing on him: how to curtail the possible drop in foreign tourists this summer and how to reorient the Papagayo development.
Why Papagayo? Because the Comptroller General (CGR) instructed the Polo Turístico Golfo Papagayo (PGPT), an entity ascribed to the ICT, to mend a series of mistakes found during a study whose results don’t favor the State’s administrative management in the subject, at all?
Among other aspects, it questions the planning, controls, deadlines, royalty payments and data bases of the development.
Initially, the period granted by the Comptroller to present a report with the measures to be taken expired last October, but an extension was granted at the ICT’s request.
Benavides admits that there are deficiencies (many of which are being corrected), but he challenges many of the criticisms.
For him, Papagayo has played a vital role in the province’s development but this doesn’t depend solely on the Polo. The project, he says, was conceived carefully but like any other investment, depends on market conditions.
Where are the rooms?
The Comptroller’s Office conducted a study that covered a period between 1991 and February this year.
One of the aspects questioned was that 16 years after the first concession was granted, in order for businessmen to invest in hotels and tourism services, nine parcels of land have yet to be allotted.
The Comptroller’s Office also questions why 13 concessionaires, many of whom were allocated land over 10 years ago, still haven’t begun their tourism projects and haven’t been sanctioned for it.
Among these are Monte del Barco, Mediateck, Cielo Azul, Le Wafou and Costa Azul del Pacífico.
Others were granted extensions by the ICT for up to 30 years.
On this subject, Benavides clarified that in order to execute the guarantees, a due process is necessary to determine the responsibilities: some could be the State´s and others could belong to investors.
Another important point refers to the rooms that were supposed to be built according to the Master Plan that has been approved since 1995.
The document indicates that of the 26,450 rooms expected, to this day only 1,196 have been built.
Among those rooms are the ones operated by the Hotel Occidental chain with Grand Papagayo (169 rooms), the Four Seasons (153) and those that belong to Grupo Papagayo with its Nakuti Hotel (80 rooms).
The ICT appealed this point because it considers that a maximum limit of 20 rooms per acre would we absurd.
The Polo is attempting to be a low intensity location and wants so substitute buildings with more nature.
The execution office is also being questioned about why they have taken so long, even years, between the date in which they sign the concession contract and the time they collect the money.
This pattern, according to the Comptroller’s Office, is detrimental to public finances because it reduces income from royalty payments for several years.
This aspect has already been rectified by the ICT now that all the missing contracts have been signed.
A vote in favor
Two of the old concessionaires already began their projects: Monte del Barco is building 600 residential units and Rancho Manzanillo, property of the Chinese company Mandarín Oriental, has joined Costa Azul del Pacífico to erect 130 rooms.
Marcela Fernández, manager of Aldesa Inmobiliaria, firm in charge of Monte del Barco, says she is unaware of the report contents, however denied ever having trouble with the Polo Turístico office.
Manuel Ardón, head of operations of Ecodesarrollo Papagayo, shared her opinion.
He says that they have complied with the commitments defined in the concession contract, which include the hotel infrastructure for Four Seasons, Exclusive Resort and the Playa Prieta Club, the first golf course, 16 apartments and 11 residences.
The marina is expected to begin operations now that it received permission from the Inter- Institutional Commission for Marinas and Tourism Docks (Cimat) last week, says its director Roberto Kopper.
Through the Comptroller’s press office we confirmed that the entity has verified the ICT’s actions.
For example, it contracted a consulting firm to suggest improvements in administrative management.
It is necessary, says the Minister, to grow and integrate new professionals. This is why they have requested more resources from the Budget Authority.
A draft to reform the regulations is also ready and could be processed during the first months of 2009.
In GonzaloVarga’s opinion, president of the National Tourism Chamber (Canatur), the study revealed longstanding planning, execution, coordination, information verification, and control and project follow-up deficiencies.
Canatur supports the ICT’s decision to restructure the project administration, which so far has been small and understaffed when the size of the task is considered.
But it also criticizes the Comptroller’s intention to add more procedures to the already existent ones.
One of these is demanding that the project plans be approved by the Housing and Urban Development Institute (INVU) when the office already has a special authority, granted by the Attorney General’s Office, to avoid going through municipalities and the INVU.
Lack: Of a planning system, absence of policies from the Director’s Council as basic guides, weak project control and follow-up system, weak information system.
Criticism: After 25 years of having begun the project, there are still parcels of land to be allotted and 13 of the tourism projects that the concessionaires committed to accomplishing haven’t been executed and don’t have any projections as to when they will be.
Regulations: The Comptroller General’s Office initial document gave the PTGP board of directors six months (that concluded last October) to investigate who was responsible for the administrative management and apply sanctions. They requested a study to determine why 13 concessions haven’t even begun.
Master Plan: Must be revised and updated and the ICT must submit a diagnosis of all the concessions that have been made. Execution periods must be clearly defined and a program to orient development must be established.
Extensions: For concession periods must be eliminated. They must identify in which of the 13 cases they can apply the guarantees and they must define adequate planning, control and follow-up systems.