​Environmental conservation, tourism and economic development: an avant-garde Brazilian solution through PPPs

Note: This blog entry was adapted from an original submission for the PPIAF Short Story Contest. It is part of a series highlighting the role of Public-Private Partnerships (PPPs) in projects and other transformative work around the world.

For the most part, protected areas in Brazil are managed by the public sector. As a result, like other countries, these areas face conservation difficulties, including a lack of resources for maintenance and other initiatives.
 

Because of this lack of public-sector financial and human resources, the private sector has provided a significant portion of funding for managing protected areas. One of these cases is in Brazil’s Minas Gerais State. The Secretary of State for Environment and Sustainable Development (SEMAD), Forest State Institute (IEF) and Public-Private Partnership Central Unit collaborated to develop a PPP model focused on management, conservation and operation of three protected areas, located in the State’s Karst region: PPP Peter Lund Cave Route.

The PPP Peter Lund Cave Route aims to structure a single, singular national and international tourist track, aligning the unique natural and cultural elements of the karst region. This new management model is demonstrating results for conservation and sustainable development, including the mobilization of public policies that value one of Brazil’s greatest characteristics: biodiversity.

The project goal is attract private partners who will:

• Work to implement and maintain protected areas’ infrastructure in protected areas in concession;
• Conduct commercial operations in these areas through visitation, tourism and environmental education;
• Preserve historical and natural heritage, and promote environmental conservation; and
• Respect environmental laws and the relationship with the surrounding community.

The project, carried out through the PPP system, will have an estimated US$20 million in initial private investment for implementation of ecotourism activities, accommodation, restaurants, visitation services, and other related infrastructure, in addition to conservation of the biodiversity in these areas. In addition, there are also five-year reinvestments of 4.6 percent of the initial investment. It is expected that, after the implementation phase of this project, the number of visitors will double within five years at the state parks that are part of this concession.

This initiative’s PPP contracts allow linking the government’s monthly payment to the concessionaire on the basis of performance and quality indicators, in order to ensure the quality of public service during the entire concession period. One of the indicators aims to reflect the socioeconomic impacts of the project on local communities, including the income and employment generation within the municipalities in which the protected areas are located, based on the idea of social bonds. This objective will strive to measure the income variations related to tourism, promoted from private partner performance.

Another PPP-related aspect for a PPP is how law enforcement is handled. Even if government delegates the protected area’s management to a private partner, the responsibility for supervise and enforcing protected area legislation remains with the government.

In this context, the government holds the power to determine maintenance standards and quality of services offered in the contract, and also to supervise and monitor activities to ensure that that the natural features of the park are being preserved. However, beyond the contract itself, the PPP operation structure provides incentives for maintaining a high standard of quality.

The private partner is responsible to attract more visitors for the parks and to maintain, conserve and preserve protected areas. On the other hand, the private concessionaire can develop supplementary activities, such as climbing, cycling, restaurants or hotels, since it has been approved by the government to increase the revenue generated and attract more visitors — which is critical to attracting and incentivizing the private partner.

PPPs can be an effective way to capture significant economic value natural assets. They can help improve the economic sustainability of protected areas, enhance the quality of services and leverage investment in conservation. In the long term, PPPs can function as a critical tool for protecting biodiversity and improving surrounding communities.