The cash-strapped Kenya Wildlife Service (KWS) has invited investors to develop and manage more than 20 of its hospitality establishments, including luxury lodges, restaurants and tented camps, as it seeks to diversify revenue streams.
The lodges on offer to potential investors are located in Kenya’s prime game reserves and parks — offering tasty investment opportunities – to individuals and institutions with the capacity to revamp and manage them profitably.
Among the prime parks and reserves targeted for development are Mt Kenya, Tsavo East, Marsabit, South Island National Park on Lake Turkana, Nairobi National Park, Ruma National Park, Meru National Park, Ol Donyo Sabuk National Park and Mt Elgon National Park.
Others are Aberdare National Park, Tsavo West National Park, Kakamega Forest, Kisumu Impala Sanctuary, Hell’s Gate and Naivasha Game Farm.
“KWS wishes to invite private investors and developers to lease, develop and manage tourism facilities such as eco-lodges, tented camps and recreation areas at various locations in KWS national Parks,” says KWS in the prospectus seen by Business Daily.
“Where selected, the developer will undertake to construct a luxury tented campsite not exceeding 30 beds together with staff housing within a period of 18 months.
“The lease would initially be for 20 years renewable for a further period of six years.”
Successful bidders will run the luxury eco-lodges and tented camps on an initial 20-year-lease that is renewable for another six years, while those seeking to build restaurants and cafes will get leases for 10 to 13 years same as those seeking to construct recreation areas.
The luxury lodges and tented camps will be built on between five and 20 acres depending on location of the parks.
Restaurants and cafes will be built on between one and five acres of land depending on location.
The successful bidders will be required set aside jobs for the local communities and provide other benefits.
“The buildings will not stand out on the horizon and should have a low energy footprint,” said KWS in the raft of conditions it has set out for bidders.
The lodges will have between 30 and 60 beds depending on location. Investors will have a grace period to set up the facilities without paying dues for 12 months.
Kenya’s 54 national parks and reserves are scattered in various parts the country and are major tourist attractions.
The popular safaris revered around the world largely buoyed Kenya’s earnings from tourism last year seeing them grow by 31 percent to Sh157.3 billion from Sh2 million visitors compared to Sh119.9 billion in 2017 from 1.4 million visitors a year earlier.
The KWS grand plan to develop the parks and create new income streams comes as it battles financial headwinds.
KWS losses jumped more than two and half times to Sh1.5 billion for the year ended June 30, 2017, from Sh571 million a year earlier despite a 15.6 per cent jump in revenues to Sh2.6 billion in the period from Sh2.2 billion a year earlier.
Its main income is from park entry fees, rental income and aircraft hire services.
The KWS in 2017 received grants from the Treasury amounting to Sh1.38 billion and a further Sh901 million from donors.
“The National Treasury gave the Service a supplementary budget support of Sh500 million in addition to the approved recurrent budget of Sh880 million to cater for salaries shortfall,” the agency says in the Auditor General’s report for the year ended June 2017.
The agency has also received major financial boost from compensation for tracts of its land hived off for infrastructural projects. For instance, KWS raked in a whopping Sh9.2 billion in compensation for land hived off national parks for construction of the Standard Gauge Railway (SGR) and the Southern by-pass.
Under Phase Two of the SGR that starts from Nairobi to Naivasha, the KWS got Sh4 billion from the Kenya Railways Corporation.
For the southern by-pass, the wildlife agency was paid Sh3.7 billion by the Kenya National Highways Authority (KeNHA) for land cut off Nairobi National Park for construction of the road.
The SGR compensation was meant for environmental restoration (Sh1.197 billion) and compensation for movement of structures (Sh278 million) but was diverted to fund operational services under recurrent expenditure owing to huge underfunding by the Treasury.
John Waweru, the KWS Director-General, told Parliament last month that KWS had only received Sh1.27 billion, leaving a balance of Sh2.47 billion that KRC is yet to pay.
Mr Waweru said the KWS redirected the compensation cash for the SGR and the Southern by-pass after Parliament drastically cut its budgetary support for the year 2015/16. The National Assembly committee on Environment effected a Sh1.5 billion cut on the KWS budget during the supplementary budget.
“This shortfall in government funding made operations difficult and as a stop-gap measure, the board of Trustees approved utilisation of SGR funds and during the supplementary budget requested the National Treasury through the parent Ministry for authority to utilise the SGR funds,” Mr Waweru said.
KWS’s plan to develop the parks comes against the backdrop of a string of heavy investments by leading luxury hotels in Kenya last year.
They include Accor Hotels, Hilton, Carlson Rezidor and Acacia Premier.
Hotel chains are increasingly facing pressure from ultra-affluent clients who demand special service.
Kenya and South Africa have been tipped as the next continental hotspots in luxury hotel investment.
Nineteen hotels are expected to open shop in Kenya in coming months, with a total of 3,453 new rooms in the pipeline, according to a report by the Lagos-based consultancy, W-Hospitality Group.
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