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Today: Nov 17, 2017

Outcome III

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OUTCOME III: Business planning and cost-effective systems are ensuring the effective allocation and management of mobilized resources

The English playwright Oscar Wild once commented that the cynic knows the price of everything but the value of nothing. Today’s cynics are those who claim biodiversity is priceless, but are not prepared to pay for it. Biodiversity and the vast ecosystem services it provide underpins climate, food, energy, health and livelihood security for humanity. Our social dilemma is that we do not pay the true cost of things we use, as natural resource still considered “public goods”, resulting in considerable biodiversity loss.

The full scale and effectiveness of financing for biodiversity remains elusive. Looking back at today’s cash flow for biodiversity, bears no reflection of what is needed or may be delivered tomorrow. An economic paradigm predicted largely on existence values has failed biodiversity. A morpho butterfly’s beauty will never outbid the Mona Liza, The change coming, is a realization that a more workable means of capturing value of biodiversity could be based on the $ trillion ecosystem services it provides to us all.

We need a Proactive Investment in Natural Capital (PINC) which provides a conceptual framework for future financing for biodiversity and ecosystem services it provides which underpin wealth creation. This opportunity falls to economic investors, perhaps stimulated by government interventions through innovative mechanisms such as “Green Development Mechanisms” and “Clean Development Mechanisms”.

Such a utilitarian view of biodiversity should not be allowed to erode the inestimable value it has for the human spirit but should secure it for future generation. It must also equitably enhance the well being of the rural poor, who livelihoods are closer to natural capital, than those who live with biodiversity, who do so much to sustain the natural capital upon which the rest of the world depends and they should be rewarded for maintaining it.

Thus, we need to find the seeds of a new economy. One in which the contribution of the biosphere to our wellbeing becomes an opportunity for positive economic flows. This new economy could see the emergence of “biodiversity superpowers” rich in natural capital and able to bargain their ecological muscle for aid and trade. This offers a comparative advantage to emerging economics, especially in developing countries that have retained much of their biodiversity intact.

While NCS currently lacks funds to undertake its critical management and protection tasks, it would likely fail to meet its conservation goals, even if adequate funds were available. This is due to its limited capacities, and lack of systems to effectively prioritize, plan, manage and monitor. Most PA management systems established to date remain ineffective due to inadequacy in design and limited capacity and funding. Together, these factors serve to undermine cost effectiveness. Therefore, NCS capacities will need to be increased in order to ensure cost-effective use of funds. This will include the development of transparent methods for allocating funds across PA’s and for monitoring both the conservation effectiveness and broader cost of effectiveness of associated spending.

In addition, PA Management and Business Planning will become increasingly important tools for cost-effective management and will be essential in determining budgetary allocations both among and within individual PAs. Cost-effectiveness will be enhanced through factors such as efficient deployment of human and other resources and avoiding duplication of tasks between individuals, departments and institutions. Monitoring of management effectiveness will become increasingly important tools in measuring and improving cost-effectiveness. Arrangement that enable stakeholders to be actively involved with management will be tested as cost-effective ways of dealing with capacity gaps where the required skills are not available within NCS.

During the preparatory phase of this project, it was estimated that the level of Government cash co-financing ($ 13.8 million) would be sufficient to bring 8 priority PA’s to a level where basic management costs are being sustainably covered ($ 12 million), with some amount remaining ($1.8M).

In order to make further, necessary progress towards financial sustainability, and to make full use of expected increase in revenue, the project will support efforts by NCS to allocate and disburse additional generated and re-injected revenues – as per the terms of the proposed Ministerial Decree – more widely across the system of 29 PA’s. These additional funds may eventually be used for any combination of the following purposes: (i) to raise one or more of the 8 priority PA’s from the level where basic management costs are covered to one where a so-called “optimal” level of financial resources is available; (ii) to raise additional PA (beyond the original 8 PA’s) to a level where basic needs are covered; (ii) for infrastructure investments and (iv) to strengthen NCS headquarter capacities.

The overall project target is to surpass 100% of the basic funding scenario by year 5 and reach 62% of the optimal funding scenario by the end of the project. Meeting these targets would put Egypt’s PA system on track to achieve the optimal funding scenario by the end of year 10 (following project completion, as per the expected targets of the proposed Ministerial Decree. Decisions on how to allocate funds beyond the initial $12M will be based on: (i) the guidelines put forward under the National Strategy for PA Financing and (ii) annual prioritization exercise in which managers of all 29 PA’s will have an opportunity to participate.

Output 3.1. Site-level planning tools at 8 priority PAs developed and implemented

Management plans define priorities for PAs whereas business plans enable the systematic assessment of financing needed to implement priority actions and of the viability of new revenue sources. They can also be used as a powerful marketing tool for donors, the private sector, to influence funding decisions in the Ministry of Finance and to enable resource distribution issues to be addressed across the system.

Management and business plans for some PAs were developed by foreign experts, and later by some NCS staff, however, none of the existing plans for PAs includes management needs and costs based on effective analysis. Thus, there are in no cases any formal links between management plans, management effective assessment, business plans and annual operative plans. Key barriers include:

  • No appropriate policy and institutional framework for planning in a broader perspective: plans are not monitored, resources are not allocated to their implementation, and responsibilities for implementation are frequently unclear
  • No general policy or practice of updating and generating management or business plans where needed
  • In some PA’s management and business plans are not even developed
  • NCS staff has limited experience in the design and implementation of management and business plans.

 

Therefore, under this output, a framework for integrating and harmonizing planning tools (e.g. Management Plans, Management Effective Assessments, Annual Operation Plans and Business Plans) will be developed and implemented at the first 3 priority PAs (Ras Mohamed, Wadi El-Rayan and Wadi El-Gemal), and later at the remaining 5, priority PAs. Support will be provided to fill gaps in the necessary components that were not made during the preparatory phase of this project as well as previous projects funded by different donors. At the end, all the 8 priority PAs will have intercomparable planning tools which together will constitute the basis for PA allocations of re-injected revenues for the remainder of the project. Throughout this process, the project will seek to identify opportunities for in-kind contribution from the business sector to mobilize their human resources and talents in order to generate business plans.

Output 3.2. Operational, transparent and efficient accounting and auditory systems at priority PAs and central system levels in place.

A prerequisite for financial planning is cost and revenue data at both PA and system level. In addition to accounting systems, financial flows need to be transparent to show how much funding PAs are obtaining and to help determine how effectively they are spending their funds. This requires a system level tracking system. Such systems increase donors and investor confidence about putting funds into PAs systems.

Baseline NCS accounting and auditing systems, respond to standard financial operating requirements of governmental institutions in Egypt. i.e. they are not designed to feed decision making and promote sound management at central and PA levels. This problem is linked to the fact that the current system only tracks the government budget, which represents only about one third of the total resources invested in the PA system; there is no system yet in place to integrate investments from EPF and donors or the private sector, with a resulting risk of duplication and overlapping. In addition, the current system is manual and this is highly labor intensive. Furthermore, there is limited capacity at PA level to generate financial information and operate accounting systems, which further impedes cost-recovery and NCS’s ability to justify new or increased fees / revenues.

Therefore, a transparent and coordinated cost accounting system will be put in place, and associated management capacities built. This will include revenue tracking for each of the 12 PAs where revenues are expected to be generated. Accounting data will be packaged and presented in ways that contribute to system-level decision making, planning and budgeting. Training in the use of the system will be provided.

Technical support will be provided to PA, NCS, EPF and Financial Department of EEAA on how to prepare and implement revenue tracking system. This will be followed by training staff on how to generate financial information and operate accounting systems, in digital forms, to facilitate cost recovery and justify new or increased fees and revenues. This will be applied to the governmental funds, revenues of EPF and also donor projects, to have one tracking and accounting system in place. The initial phase during the first year of the project will be implemented and tested at the 3 priority PAs, and later on, on the remaining priority PAs.

Output 3.3. Systems for monitoring and reporting on financial and management performance developed and implemented.

Monitoring management performance and effectiveness is essential to ensuring accountability of funds expended. Current monitoring and reporting systems are mostly designed to fulfill the needs of government accounting and reporting systems. No analysis or reporting regarding return on investments is undertaken, although baseline data exist. An informal monitoring tool is in use to indicate how and why funds are allocated across PAs.

Therefore, a reporting and evaluation system will be developed to report on how effectively PAs use their available finances in achieving their stated objectives. This will include both system and PA management effectiveness assessment and will serve as an important mechanism for linking financial and management performance and will support annual reviews in which PA allocation will be possible. As a result, PA revenues and expenditures will be fully and accurately reported by PA and NCS authorities to stakeholders.

EEAA has started recently this process, however, responsibilities are not well defined. Therefore, this output will be implemented through a small team from the technical office of NCS and financial department to work closely with EPF and EEAA to establish systems for monitoring and reporting, which will be tested first at the 3 priority PAs.

Output 3.4. Well tested methods for allocating funds across individual PAs and objectives developed, revised and implemented.

Resource allocation needs to be based on a set of criteria linked to management objectives and performance in order to optimize the efficient allocation and distribution of funding and resources. These criteria include biodiversity importance and imminence of threats to (globally) significant biodiversity. Although some allocation criteria exist at EEAA / EPF / NCS, there is no method or clear procedure for annual financial allocations among individual PAs. Part of the problem is that NCS lacks financial and administrative autonomy, and does not have enough leverage to influence budgeting and resource allocation to PAs. Overall, there is no financial needs assessment available to guide effective resource allocation to PAs.

Therefore, the project will assist NCS to develop and implement a revised and transparent, bottom up annual budgetary exercise for allocating financial resources across PAs and objectives, together with revenue generating strategies. Resource programmed under this exercise will include Government budgetary allocation, re-injected revenues and donor funds. This exercise will depend on a system-level strategic evaluation (every 5 years) along with annual inputs from individual PA managers, who will learn to assess financial needs for their PAs and to propose and defend PAs priorities based on an agreed set of criteria, including biodiversity criteria, and, in the case of certain infrastructure, potential return on investment. A number of cross-site objectives, or themes, e.g. conservation of migratory birds, will also be elaborated. External parties (e.g. UNDP and other donors) will be invited as observers to improve transparency of this process. Monitoring systems developed under Output 3.3. will help to ensure the resource allocation follows financial needs assessment.

Output 3.5. Implementation of system-level management plan at priority and other sites

The current PA system plan in Egypt is not based on management categories (e.g. IUCN categories) and national priorities (e.g. implementation of MDGs, local community benefits, etc). The existing PA system is classified according to different regions (e.g. western desert PAs, Sinai PAs, ) and does not take into account the different ecosystems of marine, wetlands, desert, and mountains. In addition, some PAs are designated as biosphere reserves, and others are RAMSAR (wetlands) sites. Furthermore, some PAs generate revenues (e.g. Ras Mohammed) and others such as geological PAs (Sannour Cave, Hasana Dome, Petrified Forests, Dababia) are primarily used by students and researchers. Some PAs are heavily populated by inhabitants (Burullus, Siwa, St. Katherine), others have scattered populations (Wadi Allaqi), and still other PAs are without inhabitants. The situation is much more complicated when we consider the existing infrastructure, staff, and budget. PAs receiving funding from lateral and international donors have reasonable infrastructure and staff but with very limited funding, whereas those PAs that have received funding from the government still suffer greatly in terms of infrastructure, staff and budget. Thus, distribution of funding to PAs is uneven and has no basis. Therefore, it is important to revise the existing PA system at central and site levels to be linked together and to facilitate fair distribution of funding, flow of information on biodiversity, and also for cost-effective financing mechanisms.

After revising the PAs Planning system, the bulk of Government co-financing will be utilized to raise capacities and improve the management performance of the eight priority PAs, as well as other sites throughout the PA system. These will include (i) recruitment and retention of well qualified staff; (ii) patrolling and related operations; (iii) fee collection; and (iv) maintenance of existing equipment and infrastructure. In addition, funds will be available to invest in areas such as (i) new infrastructure such as visitor centres, show rooms, housing facilities and offices for rangers, tourist facilities, etc, (ii) other infrastructural investments agreed to as part of concession arrangements; (iii) piloting of low cost technologies of waste water treatment or solid waste management projects to reduce impacts within PAs; (iv) biodiversity research and monitoring; (v) support for local communities for income activities (e.g. medicinal plants products) and engagement in conservation activities; (vi) purchase of equipment and (vii) activities aimed at reducing degradation of natural habitats. The project funds will be utilized for implementing demonstration activities including those in the management plans of priority PAs.

The project will also continue its support of NCS by establishing specialized units to link the biodiversity department with PAs, for reporting to regional and international conventions (e.g. RAC/SPA, CBD, RAMSAR, CITES, and CMS). The technical office of NCS as well as the administrative and financing department will also be involved in the planning process with more focus on cost-benefit financing mechanisms.

Output 3.6. Training and support networks to enable PA managers to operate more cost-effectively and deliver client-oriented services.

The new generation of protected area professionals must work with colleagues from other professions who are together fully supportive of the need to link protected areas more productively with social-economic development, accepting the challenge of providing leadership to achieve sustainable development across the landscape and in the hearts and minds of human society.

This output tends to include informal practices based on site visits, verbal guidance and sharing available information from literature on the subject (e.g. IUCN, the worldwide internet, Clearing House Mechanism, newsletter, face-book, etc). Resources are shared across the PAs based on needs and opportunities. In NCS, there are no technical assessments or tools in place to promote or facilitate cost-effective operation, due to the limited capacities to provide training in the use of cost-effective management tools. Together with the very poor incentive structure, these barriers make it extremely difficult for NCS to attract and retain highly qualified staff.

This input will be achieved by providing guidance on cost-effective management which will be developed for use by PA managers and NCS staff. They will be trained in finance-related areas such as financial management and cost-effective management, along with overall PA management, such as visitor management, based on operational plans. Managers will learn to develop annual action plans that fit allocated budgets, meet targets and objectives, and are linked with monitoring and performance evaluation. An inter PA’s network will be established for PA managers to share information with each other on costs, practices and impacts. Monitoring and learning systems regarding cost-effectiveness will be in place and fed into system management policy and planning. Furthermore, and given the current emphasis on payment for services, PA staff and managers will be supported (either through training or hiring of dedicated staff) to deliver client-oriented services with the aim of increasing client satisfaction and henceforth willingness to pay for PA services.

Output 3.7. PA related BD 2010 indicators for Egypt operational and feedback mechanisms with financing and management established.

The Biodiversity 2010 target, to significantly reduce biodiversity loss, was endorsed at both COP6 in Holland, and WSSD, Johannesburg in 2002. This 2010 target was not met globally, and only partially at the regional and national level (COP10). The main driving direct causes of biodiversity loss were: habitat alternation and fragmentation, over use of natural resources, pollution, invasive species and climate change. In Nagoya, Japan, October 2010, the Conference of Parties (COP’s) adopted a new strategic plan for biodiversity strategy (2010-2020) with 5 specific goals and 20 targets. States were requested to update / revise their National Biodiversity Strategy and Action Plans (NBSAPs) in accordance with the Strategic Plan for Biodiversity.

Another important decision of COP10 was the adoption of the resource mobilization strategy (based on innovative methods for revenue generation). Similarly, the third objective of CBD (fair and equitable sharing of the benefits arising out of the utilization of genetic resources) was visualized by adoption of the Access and Benefit Sharing (ABS) protocol.

To enable states to update their NBSAPs several workshops were held in different regions, including North African and Middle East countries. Meanwhile GEF approved assisting countries with financial resources (up to 500 000 US $) to revise / update their NBSAPs.

NBSAP is based on the following goals: identifying causes of biodiversity loss; addressing direct pressures through mainstreaming of biodiversity in all development sectors; safeguarding ecosystems; assuring benefit sharing of biodiversity economic values, and enhancing implementation. NBSAP will be presented in 6 parts: Preparation (rapid stocktaking and review of relevant plans, policies and reports; identifying stakeholders, consultation and awareness; supplementary studies), setting national priorities and targets (principles and main priorities of the strategy through national consultations); developing the strategy and action plan (to implement agreed targets through national consultations; address the application and implementation of the NBSAP at sub-national levels through consultation; apply sectoral integration including mainstreaming into development, poverty reduction and climate change plans through sectoral consultation); Development of implementation plans and related issues (developing a plan for capacity development for NBSAP implementation; conducting a technology transfer needs assessment alternative; developing a plan for increasing technical capacity; developing a communication and outreach strategy for the NBSAP; developing a plan for resource mobilization for NBSAP implementation); Institutional, monitoring, reporting and exchange (establishing / strengthening of national coordination structures; CHM development; development of indicators and monitoring approach; fifth national report on NBSAP implementation), and adoption by the government.

The tipping points for NBSAP are: national targets should be set by 2012; NBSAP should be revised by 2014; the fifth national report on NBSAP implementation produced by 2015; targets achieved are reported regularly.

As this project is linked directly with the revised NBSAP which has several components (e.g. resource mobilization and revenue generation, communication and outreach strategy) related to the project, it was agreed with NCS to work together as partners for the project and NBSAP. The project will finance several components of the NBSAP, and NBSAP will finance other components of the project which deal with the planning and implementation of Post 2010 targets and indicators. Based on the above, a Project Identification Form (PIF) for GEF funding was prepared and approved by EEAA. If funding is approved by GEF before the end of 2011, then the Annual Work Plan (AWP) or 2012 will be revised to include NBSAP. The purpose of this output is to ensure that conservation monitoring and evaluation system, meaningful at both site and system levels, is put in place to act as a safeguard against potential drifts to focus solely on revenue generation which could undermine biodiversity conservation. The project aims that BD conservation remains the end, and revenue generation and management effectiveness are means to this end. By adopting the BD 2010 indicators developed by NCS as part of its national reporting and planning under CBD. The project aligns with NCS’s priorities and obligations under CBD.