Afghanistan - Tourism Sector Review

Document of The World Bank FOR OFFICIAL USE ONLY CONFIDENTIAL Report No. 1698-AF AFGHANISTAN TOURISM SECTOR REVIEW July 29, 1977 Tour!sm Projects Department Thil document has a restricted distribution and may be used by recipients only in the performance of the r official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Free Market Average Rate 1976/77 US$1 - 47.38 Afghanis 1 Afghani = US$0.0211 Note: The official rate of Afghanis 45 per dollar is used only for transactions with the IMF YEARS The Afghan year is March 21 to March 20. The year starting on March 21, 1976 is referred to as 1976/77. This is the year 1355 in the Afghan calendar. FOR OFFICIAL USE ONLY CONFIDENTIAL AT'GHANISTAN TOURISM SECTOR REVIEW TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ................................. i - ii CHAPTER I : Tourism Attractions .................. 1 CHAPTER I- : Development of Demand ................ 2 CHAPTER III : Development of Supply ................ 4 CHAPTER IV : Economic Aspects ..................... 7 CHAPTER V : Organization of the Sector............ 8 CHAPTER V' : Technical Assistance ................. 10 CHAPTER VIJ : Sector Development Plans ............. 11 CHAPTER VIIK : Future Tourism Development ........... 13 ANNEX I : Table 1 - Tourist Arrivals by Land (1965-76) Table 2 - Tourist Arrivals by Air (1965-76) Table 3 - Tour Prices of Afghantour ANNEX II : Tourist Roads and Airports ANNEX III :, Proposal for Traditional Hotels This document has a testricted distribution and may be used by recipients only in the performance of their offcial duties. Its contents may not otherwise be disclosed without Worid Bank authorization. AFGHANISTAN TOURISM SECTOR REVIEW SUMMARY AND CONCLUSIONS i. Afghanistan's main tourism assets are its dramatic mountain scenery, its cultural and ethnic diversity, several historic sites of which the most outstanding is Bamyan, where the largest sculptures of the Buddha in the world have been carved into the mountain wall, and a great wealth of handicrafts, outstanding among which are the hand-made rugs. Afghanistan's tourism attractions constitute a potential which until now has been exploited only to a very minor extent. ii. Visitor arrivals increased very rapidly from 1965 to 1971 with an average growth rate of 48.5% per annum. Thereafter, partly reflecting political factors such as the Indo-Pakistan war late in 1971 and the change in regime in Afghanistan in 1973, traffic declined. Total visitor arrivals numbered 91,000 in 1976 as compared with 113,000 in 1971. Most visitors to Afghanistan arrive by land; air arrivals constitute only 26% of the total. Though reliable data are not available, it is probable that the great majority of all European and Australasian visitors arriving by land are "in transit," travelling between Europe and India/Nepal by road. Probably more than half of all air arrivals are on business. Hence visitors travelling to Afghanistan on holiday either as a single destination or as part of a regional multi-country tour probably account for only about 10% of all arrivals. iii. Services within Afghanistan for the visitor are limited. There is only one first-class hotel--the Kabul Intercontinental--with 187 rooms. There are several second and third category hotels in Kabul, having in all about 250 rooms, and many small establishments, most of which have less than 20 rooms, catering for the low-budget visitor. The standards of facilities at other tourist destinations outside Kabul are frequently unacceptable ex- cept for the low-budget visitor. With few exceptions, the standards of management and service in the hotels are low. Qualified staff even for key positions are not available. A similar lack of expertise and managerial capacity is found in the major transport undertakings serving foreign visitors--Afghantour which is virtually the only organization providing local tours by road, and Bakhtar Airlines which is responsible for domestic air services. Both are government-owned. Lv. Technical assistance from abroad has been provided for the tourism sector over the past twenty years, but the impact has so far been very - ii - limited. The necessary re-organization of the government structures dealing with tourism has not yet been brought about. These structures do not have the capacity or the incentive to provide the standards of service which the international market requires. At the same time, re- strictions on the private sector seriously hamper the provision of ser- vices by private operators. Hence the major constraints to the growth of the sector lie in organizational structures and the lack of technical knowledge and managerial capacity rather than an absence of tourism attractions or market limitations. Ways need to be devised (i) to provide the required managerial and technical know-how (possibly by concluding management contracts with foreign operators extending over several years but with a heavy emphasis on the training of counterpart staff) and (ii) to restructure the government bodies dealing with tourism to separate the commercial from the properly governmental functions. v. Unless agreement can be reached with the Afghan authorities on the need to overcome the organizational, technical and managerial im- pediments to development, and on the means to achieve this, the benefits to be gained from providing additional technical assistance or capital aid are likely to be small. Were such agreement to be reached, however, and a well conceived program of new accommodation capacity and improved transport services devised and implemented, it is likely that the numbers of holiday visitors coming to Afghanistan (other than those "in transit") could be increased quite rapidly. An increase in this market segment from approximately 9,000 to say 30,000 or more over the next four to five years is clearly feasible in relation to the potential market. AFGHANISTAN TOURISM SECTOR REVIEW I. TOURISM ATTRACTIONS 1. Afghanistan offers some of the most dramatic scenery in the world. A great mountain range-the Hindu Kush, an extension of the Himalayan chain-traverses the country from east to west. The mountains in the central, eastern and southeastern parts of the country, with peaks rising to 25,000 feet, contrast with the plateau of the north, continuous with the steppes of Turkestan, and the great deserts of the south-west. Between the main ranges, largely devoid of vegetation, are fertile valleys, green under irrigation, and on the northern plains nomadic peoples herd their flocks of sheep and goats, carrying with them their possessions by horse and camel. 2. The geographical variety of Afghanistan is paralleled by the diversity of its peoples and cultures. In the south and east the Pashtuns, the dominant group, have strong cultural and ethnic ties with Pakistan, while in the west the Tajiks are descendants of the conquerors from Persia, and the peoples of the north, such as the Uzbeks, Turkomans and Kirghiz, are culturally and ethnically linked to the peoples of Soviet Central Asia. 3. The long history of the country records repeated incursions by different civilizations and many vestiges of these remain today. Once a Persian province, its conquest by Alexander the Great introduced Greek culture which later merged with Buddhist traditions to produce outstanding examples of Graeco-Buddhist art. The great Buddhas at Bamyan date from this period and constitute one of the world's major historical and religious sites. Other monuments dating from later centuries include the large mosques at Herat and Mazare Sharif and the great minaret at Jam. Many ancient sites have still to be fully explored, while still others have been destroyed as, for ex;ample, the old city of Bamyan devastated by the hordes of Genghis Khan in 1,22. 4. Of special interest to tourists,who are able to visit Afghanistan in the fall or winter is the "buzkashi"--a game played by the horsemen of the northern plains. The objective is to seize a beheaded calf, ride around two posts which mark the ends of the field and try to place the animal in a circle which is the target. Opponents try to snatch the animal from the player and violent and occasionally lethal clashes ensue. The game is re- ported to have been played since the.time of Genghis Khan and it provides an exciting spectator sport. October marks the opening of the buzkashi season, which continues until April. - 2 - 5. Besides its scenic, historical and cultural attractions, Afghanistan offers to the visitor a wealth of handicrafts. Outstand- ing among these are the hand-made rugs, but also available in great variety are embroidered coats of sheepskin, coats and caps of other skins, including Karakul., embroideries, jewelry made of gold, silver alloys and semi-precious stones, brass and copper vessels, and ancient weapons (or reproductions) with mother-of-pearl inlay. 6. Afghanistan's many tourist attractions together constitute a potential which until now has been exploited only to a very minor extent. II. DEVELOPMENT OF DEMAND 7. Afghanistan's tourism statistics are very limited. Only visitor arrival figures have been collected on a regular basis and only since 1965. Even these figures are not comprehensive; they include visitors on holiday or business, but not those on official duty. Nevertheless, the series probably includes the great majority of all visitors. A further limitation of the arrival figures is that visitors are recorded by nationality and not also by country of residence. In many cases, these are likely to be the same. It is probable, however, that a significant number of European and North American visitors are people living in the Near East or in neighboring countries, but there is no way of assessing how large a proportion this might be. There are no figures of arrivals by purpose of visit or length of stay, and no records of visitor expenditures. Partial data are available on these topics, but any conclusions drawn must be tentative. 8. Within the limitations of the statistics, some trends are dis- cernible. A rapid increase in the total numbers of tourist arrivals from 1965 to 1971 has been followed by a period of stagnation, as shown in Table 1. Table 1: TOTAL TOURIST ARRIVALS BY AIR AND BY LAND (1965-1976) Year Air % Change Land % Change Total % Change 1965 2,606 - 7,933 - 10,539 - 1966 9,017 +246 14,396 + 81 23,413 +122 1967 10,794 + 20 27,091 + 88 37,885 + 62 1968 8,442 - 22 36,097 + 33 44,539 + 18 1969 10,383 + 33 52,706 + 46 63,089 + 42 1970 16,149 + 56 84,084 + 60 100,233 + 59 1971 18,174 + 13 94,935 + 13 113,109 + 13 1972 21,064 + 16 89,174 - 6 110,238 - 3 1973 22,731 + 8 68,931 - 23 91,662 - 17 1974 17,895 - 21 78,327 + 14 96,222 + 5 1975 20,842 + 16 70,291 - 10 91,133 - 5 1976 23,365 + 12 67,615 - 4 90,980 - 2 - 3 - 9. A significant decline in arrivals has been recorded in those travelling by land while the numbers of air arrivals, though fluctuating, have increased moderately since 1971. These trends partly reflect a sub- stantial shift in visitor origins. The numbers of visitors from Pakistan have declined sharply since 1970/71, when they accounted for approximately 50% of all visitors, while visitors from Europe and Australia continued to rise until 1975, though much more slowly (4.5% p.a.) than in the period 1965-71146.6% p.a.). In 1976 there was a modest decline in visitors from outside the region. These changes are shown in Table 2. Table 2: REGIONAL AND EXTRA-REGIONAL TOURIST ARRIVALS (1965-1976) Year Total % Change Extra-Regional % Change Regionall/ % Change 1965 10,539 - 6,888 - 3,651 - 1966 23,413 +122 12,948 + 88 10,465 +187 1967 37,885 + 62 18,680 + 44 19,205 + 84 1968 44,539 + 18 23,522 + 25 21,017 + 9 1969 63,089 + 42 35,484 + 51 27,605 + 31 1970 100,233 + 59 45,897 + 29 54,336 + 97 1971 113,109 + 13 58,190 + 20 54,919 + 11 1972 110,238 - 3 56,117 - 4 54,121 - 1 1973 91,662 - 17 57,806 + 3 33,856 - 37 1974 96,222 + 5 62,558 + 8 33,664 - 1 1975 91,133 - 5 64,650 + 3 26,483 - 21 1976 90,980 - 2 60,903 - 6 30,077 + 14 1/ Regional tourist arrivals are tourist arrivals from India, Pakistan and Iran. While the great increase in regional traffic to 1971 and the subsequent decline reflected mainly changes in the numbers of visitors from Pakistan, who have- been attracted to Afghanistan primarily for shopping, the numbers of visitors from India and Iran have increased fairly steadily over the past decade. 10. The rapid growth in numbers of extra-regional visitors from 1965 to 1971.reflected mainly increases in North American, Western European and Australasian visitors. In the case of European and Australasian traffic, the increases were largely in visitors travelling by road and reflect the increas- ing popularity of the long-distance overland tours between Europe and India/ Nepal which pass through Afghanistan.. There is, however, no breakdown between visitors arriving by land who are "in transit" to or from India/Nepal and those who are visiting Afghanistan as a major destination, but it is probable that the great majority of all European and Australasian visitors arriving by land are "in transit." 11. Among visitors arriving by air, who accounted for 26% of all arrivals in 1976, it is probable that a substantial proportion are on business. The majority of visitors from India arriving by air and not less than half of all air arrivals from Europe and North America are probably on business. 12. Political factors are likely to have been important in the sharp slowdown in tourism to Afghanistan since 1971. The Indo-Pakistan war of 1971 and the change in government in Afghanistan in 1973 are among the more easily identified political events of significance, while the great strengthening of the Afghani vis-a-vis the US dollar and the British pound among major currencies since 1971 has no doubt also contributed to the slowdown. Besides the increases in costs of a visit to Afghanistan caused by changes in exchange rates, costs have risen also because of large increases in prices of services in Afghanistan, and it seems probable that this factor has become increasingly important in the past two years, when exchange rate relationships have been more stable. III. DEVELOPMENT OF SUPPLY 13. Statistics on visitor services are as limited as those on visitor traffic. Total accommodation capacity has been estimated at some 4000 beds of which some 50% are located in Kabul. Only one hotel--the Intercontinental in Kabul--records visitor statistics and statistics of its operations. No visitor or operating statistics are available for the hotels of the State Hotel Authority, which operates sixteen hotels widely dispersed through the country, or for privately owned hotels. The Kabul Intercontinental with 187 rooms is the largest hotel in Afghanistan and the only first class hotel in the country. There are several second and third category hotels in Kabul, having in all some 250 rooms, and many small establishments, most of which have less than 20 rooms, catering for low-budget visitors. There are hotels with more or less acceptable standards of accommodation at major tourism destinations outside Kabul, such as Bamyan, Mazare Sharif, Herat and Kandahar. The State Hotel Authority also owns hotels at other centers, such as Khenjan, Ghazni and Gardez, but these serve foreign visitors to only a very limited extent. The private sector has shown enterprise in constructing facilities at major tourism destinations such as Kabul, Bamyan and Mazare Sharif, but the standards of these facilities are frequently unacceptable except for low-budget visitors. The bulk of the accommodations at Bamyan and Mazare Sharif is in "yurt" villages (the yurts are a modified form of the traditional transportable house, used by nomadic peoples in Afghanistan, made of skins stretched on a wooden frame), but these can be made quite comfortable and, with the addition of bathrooms and appropriate common facilities, made suitable for the more affluent visitor. 14. Though visitor-nights at the Intercontinental have increased substantially since 1970 (from 27,173 in 1970 to 43,535 in 1976) the overall annual bed occupancy rate is still low--less than 34% in 1976. -5- Seasonal fluctuations in traffic are large, reflecting a substantial share of vacation visitor traffic in the total. The peak month is October, the opening of the buzkashi season, when room occupancies above 70% were achieved in. 1976, but in only four months of the year (May, August, September and October) were room occupancies above 50% realized in 1976. Over the winter months CDecember - February) room occupancies averaged less than 20%. While statistics are lacking, it seems likely that average occupancies-and the pattern of seasonality in other hotels are not more favorable than for the Intercontinental. 15. With a few exceptions, the standards of management and service in the hotels are low. Such standards are probably acceptable for the low-budget visitor, but not for the more affluent. Qualified hotel managers and other key staff are not available (or if available are not employed), except at the Intercontinental. 16. A similar lack of .expertise and managerial capacity exists in the major transport undertakings serving foreign visitors--Afghantour, which is virtually the only organization providing local tours and road transport services for tourists within the country, and Bakhtar Airlines, which is responsible for providing domestic air services. Tourists transitting Afghanistan between Europe and India/Nepal travel in their own vehicles or in buses provided by foreign tour organizers and make little use of Afghantour's services, but vacation visitors arriving by air and some arriving by road are required to use Afghantour in the ab- sence of other tour organizers. While Afghantour, a Government-owned body, does not have an absolute legal monopoly, the legal rights of private tour agencies to operate are at present so unclear that Afghantour effectively enjoys a monopoly position. 17. Afghantour has gradually expanded the number and variety of its tours. It is offering 37 different tours in 1977, ranging from half-day tours of Kabu and neighboring sites to 14 day tours including visits to Mazare Sharif, Herat and Bamyan, and longer tours to include the Central Route, the road running directly east-west between Kabul and Herat through the great mountain ranges of the Hindu Kush. Afghantour handled 3,100 tourists in 1970. This number had risen to 8,000 by 1975 and 8,800 in 1'976. This is still a small proportion (less than 10%) of all foreign visitors. The numbers handled by other travel agencies in Afghanistan amounted in 1976 to only a few hundred. Of the total handled by Afghantour in 1975, 96% were groups. The experience of different customers of Afghantour naturally varies. Many are satisfied, but many have complained of poor service, unreliable vehicles, unqualified guides and drivers, and the imposition of extra charges beyond what was agreed as the price.of the tour. Some European tour operators in particular have complained that Afghantour's monopoly position compels them to use guides who do not speak the language of the group as well as poorly equipped vehicles. They also express dissatisfaction with unreliable accounting and pricing procedures. From the evidence available, it appears that there is substantial room for improvement in the reliability of equipment, standards of service and in the qualifications of personnel. - 6 - 18. Internal air services of Bakhtar Airlines are designed primarily to meet domestic needs and only secondarily to provide services for tourists. Of 26,850 passengers- carried in 1976/77, only 6,823 (25%) were tourists. Bakhtar's fleet is small (2 Russian Yak 40 jets carrying 26 passengers and 3 Canadian De Haviland Twin-Otters carrying 19 passengers) with severe operational load limitations due to the aircraft types and the climatic and topographic conditions in Afghanistan. Hence the services are frequently inconvenient for tourists as well as unreliable. Studies have been made of the operations of Bakhtar and of the feasibility of acquiring new aircraft to enable improved and more reliable services to be introduced, but until now no action to bring about such improvements has been taken. 19. Air access to Afghanistan is provided at present by the national carrier, Ariana Afghan Airlines, Iranair, Indian Airlines, PIA and Aeroflot. Ariana flies from Kabul to London, Paris, Frankfurt, Amsterdam, Rome and Istambul in Europe, several cities of the Middle East, Tehran, Tashkent, Amritsar and New Delhi. Aeroflot links Kabul, Tashkent and Moscow. Ariana, in which Pan American holds 49% of the equity, presently operates three aircraft (a Boeing 720 and two Boeing 727s) at high average load factors. Its services from the west involve night flights and early morning arrivals at Kabul. Though rather inconvenient, this is probably not a serious impediment to the growth of tourism. More important is the fact that many major airlines flying between Europe and Asia overfly Afghanistan. The large jets on these routes cannot land at Kabul, and until a new airport with modern facilities is built, air service to Afghanistan will continue to be limited. Prices 20. With the marked change in exchange rates since 1971, prices to the tourist of hotels and services in Afghanistan have increased substan- tially, particularly in dollar terms. Room prices at the Intercontinental (in excess of US$40 per night) are comparable with or even slightly higher than in other Intercontinental hotels in many developing countries, and considerably above tariffs at Intercontinental hotels in India and Pakistan. Food and beverage prices are also high, the latter reflecting heavy duties on imported alcoholic drinks. Room prices in lower category hotels are much less (US$20 per night or less) and substantial discounts are given for groups. The standards of accommodation in these hotels are, for the most part, low, however, and barely acceptable for the more affluent visitor from Europe or North America. The low standards reflect many factors, but most importantly the lack of skilled management. For the low-budget traveller very cheap accommodations are still available in small hotels or pensions (US$2-4 a night) and food at low cost, though inevitably accompanied by some risks to health. 21. Prices for tours offered by Afghantour are quoted in US dollars, and in dollar terms the price increases over the period 1974-77 have been large. (See Annex table 3). For example the group rate per person - 7 - for 2 or 3-day tours to Bamyan and Rande Amir from Kabul have almost tripled between 1974 and 1977 as have the rates on 2 to 3-day tours to Mazare Sharif and Kunduz. The group rates per person on the longer (5-day) tour to Banyan, Bande Amir and Mazare Sharif have approximately doubled, while the rate for a 5-day tour to Kandahar and Herat has in- creased by approximately three and a half times. For one or two persons travelling by car, the price increases have been more moderate--for the more popular tours to Banyan and Mazare Sharif prices have approximately doubled between 1974 and 1977, but for the tour to Kunduz and to Kandahar and Herat prices have almost tripled. The dollar/Afghani rate has de- preciated over this period by approximately 15%, but the price increases have considerably exceeded the exchange rate changes. 22. Price increases in terms of other currencies, for example German marks, have also been very large. While costs, particularly of fuel, have undoubtedly risen substantially over the past four years, it is difficult to avoid the conclusion that Afghantour have endeavoured to exploit, with some success, their monopoly position. Training 23. Training is provided by the Intercontinental Hotel for its own staff and for three winter months of the year for a few staff from other hotels. The Intercontinental provides a full range of courses for all departments, but does not provide management training. The Hotel Manage- ment School within the Ministry of Education aims to provide a four-year program, including general and vocational training in the first year, and vocational training in the three subsequent years. It presently occupies very restricted premises, inadequately equipped, but expects to move to new premises within a year. Its intake is presently 40 students a year and it provides for all students training in a range of skills, including bookkeeping, typing, English, reception, food and nutrition, cooking, hygiene, and waiting. It does not, as its name implies, provide training in hotel management. Neither the present school nor the new school is attached to a practice hotel, so that the students have little or no opportunity to put into practice what they learn in the classroom. Moreover, the rather general nature of the courses offered and the lack of specialization must raise questions about the appropriateness of the training provided. IV. ECONOMIC ASPECTS 24. The data required for an assessment of the economic returns to Afghanistan from tourism are not available. There are no statistics of employment in the sector and no reliable figures of visitor expenditures. Data for calculating returns on investment in the sector are also lacking. 25. The official estimate of foreign exchange receipts from tourism is approximately US$ 12 million equivalent. Other estimates have been - 8 - made by the Afghan Tourist Organization CATO), which on the basis of estimates of average daily expenditures of visitors arriving by land and air and average lengths of stay, result in a figure of approximately US$30 million for 1975. This seems on the high side, assuming as it does longer lengths of stay (10 days for the visitor arriving by air and 13.5 days for the visitor arriving by land) than seem likely given the probable composition of visitor traffic by purpose of visit--i.e., business, "transit" and vacations in Afghanistan. In the absence of reliable data no firm conclusion on foreign exchange earnings can be drawn. 26. A major uncertainty relating to expenditures is the extent of tourist purchases of handicrafts, including rugs. It is evident that the number of shops in Kabul catering primarily to tourists has increased very greatly in the past decade, but no figures are available of sales to tourists. Although the direct impact of tourism may be restricted geographically to the relatively few points of major tourist interest, purchases of the great variety of handicrafts available in Kabul and other centers expands the impact of tourism to much wider areas of the country. 27. Financial accounts of Afghantour and the State Hotel Authority do not provide a meaningful record of profits and losses or a basis for evaluating returns on investment in these organizations. According to its accounts, the Hotel Authority makes profits, but were proper pro- vision for depreciation and recovery of capital to be made, it is likely that this would more than offset any operating profit. Bakhtar Airlines makes substantial operating losses. The Intercontinental Hotel is cur- rently making operating profits, but it has not since its opening been able to service the capital invested in it. (This partly reflects the relatively unfavorable terms on which this capital was obtained.) While it appears from the limited data available that the returns on Government investment in the tourism sector have until now been marginal or negative, there is evidence that returns on some private investments have been high. Hence it cannot be concluded that further investment in the sector is not justified. Low returns in the past have reflected inappropriate invest- ments and poor management in many cases. 28. In order that the Government might evaluate the priority of the tourism sector in the country's economic development, it is essential that more comprehensive statistical data on the sector should be collected. V. ORGANIZATION OF THE SECTOR 29. The Civil Aviation and Tourism Authority (CATA) is the top administrative authority in the tourism field in Afghanistan. Responsible to the Authority is the Afghan Tourist Organization, a public agency responsible for the organization, promotion and development of tourism in the country. The President of ATO is appointed by the Civil Aviation and -9- Tourism Authority. The lines of..authority from CATA upwards are unclear, as it does not' presently report to any particular Ministry and hence is not represented in the Council of Ministers. As decisions on tourism develop- ment affect and are affected By the decisions of many Government ministries and agencies, a mechanism for coordination at the highest level of Govern- ment is essential for the effective development and implementation of tourism policy. 30. In the absence of adequate private participation in the provision of facilities for foreign visitors, the ATO set up Afghantour as a branch within ATO to provide the services of a tour operator and travel agency within Afghanistan, to provide road transport services and to operate accommodation facilities at Bamyan and Nuristan. In earlier years, it appears to have been in the interest of the growth of tourism that Afghan- tour should have provided such services, which the private sector was unwilling or unable to provide, but now that the sector is established, its further growth will largely depend on a major upgrading and expansion of services which Afghantour and other public sector enterprises are hardly in a position to provide. The international tourism market is highly competi- tive and to meet its requirements effectively demands a level of efficiency and organization which a public enterprise in Afghanistan would have great difficulty in meeting. The staff of Afghantour now numbers approximately 280, but very little emphasis has been given to staff training, and the great majority of the staff, including many in key positions, have neither the training nor the incentives to enable them to operate effectively. 31. By recent legislation the ATO is legally empowered to license tourist facilities End regulate the industry, including hotels, tour operators and travel agencies, and guides. It is required to enforce certain standards which have still to be formulated. It also has the ,function of tourism promotion. The status of Afghantour as a branch of the ATO necessarily creates a situation where ATO is being asked to license private enterprises which will compete with itself. Such licenses have not been given and, as indicated above, this has resulted in a situa- tion where Afghantour has effectively a monopoly position. The separation of Afghantour from ATO has been recommended to the Government. Such a step is presently being considered, and is necessary, if a framework is to be created to enable private enterprises to compete with Afghantour in providing the standards of service which the international market requires. 32. The public. sector owns more than 50% of the estimated total hotel capacity in Afghanistan. Six different -state enterprises own hotels in Kabul and.other major.centers, of which the largest in terms of acco=moda- tion capacity is the State Hotel Authority. Another state company owns the Intercontinental Hotel. In addition many provincial and city governments own and operate hotels. Clearly only a small proportion of the total hotel capacity in the public sector is of actual or potential value for interna- tional tourism, but the multiplicity.of ownership and lack of coordination among owners prevents the more effective utilization of the 'facilities and the adoption of improved management where skilled management is critically short. - 10 - 33. As indicated above, the private sector has added to hotel capacity in centers of major tourist interest, though in most cases the standards of these facilities are acceptable only for the low-budget visitor. There is evidence that private investors would be willing to add capacity of higher standard, particularly if this could be integrated with private tour operations. Under the recent legislation, the ATO is required to classify accommodation capacity and regulate prices as well as license new ventures. Unless objective standards for such regulation can be clearly established, however, this could constitute a serious impediment to further private investment. VI. TECHNICAL ASSISTANCE 34. Over the past twenty years, a considerable volume of technical assistance has been provided for the tourism sector in Afghanistan. L- mediately after the establishment of the ATO in 1958, the USAID sent a hotel expert to advise on hotel development. In 1965 a substantial "Survey of Tourism in Afghanistan", again financed by USAID, was pre- pared, which, inter alia, proposed in rather broad outline a develop- ment plan for the sector and made a number of sound recommendations on needed changes in organization. A five-year UNDP/ICAO project was started in 1970 in cooperation with the Afghan Air Authority to assist in the development of state-owned domestic air transportation. The project included assistance in organization and training of management personnel, pilots and aircraft maintenance personnel, advice on airfield construction and development of telecommunications and other technical services. A wildlife expert from FAO visited Afghanistan in 1970, a wildlife consultant was employed by ATO in 1972/76 and a UNDP/FAO project for the conservation and utilization of wildlife was implemented in 1973/75. In 1971 a UNOTC/UNDP project was initiated to provide technical assist- ance for the "Organization, Development and Promotion of Tourism." At about the same time a study, financed by the UNDP, recommending a program of investment in tourism facilities, an organizational plan and training programs, was prepared with the IBRD as executing agency. This study was followed by a detailed design study in 1973/74, also financed by UNDP, for new hotels im Bamyan and Kabul, again with IBRD as executing agency. ILO has assisted in reviewing training needs and preparing project proposals for UNDP financing, but these have not so far led to the imple- mentation of training projects. 35. Several short-term missions from Unesco on cultural tourism have recommended measures for the preservation and restoration of cultural and historical sites. A Unesco project to restore the mosque at Herat is under way, as is the project for the partial restoration of the great Buddhas at Bamyan, with assistance from the Indian Government. 36. A project to construct and equip a new Flight Information Center CFIC) at Kabul, technical assistance to ensure the provision of adequate - 11 - air navigation services, and consulting services to provide preliminary engineering and financial and economic feasibility studies for a new airport at Logar, some 47 kms south of Kabul, was partly financed by an IDA credit in 19*73.- The FTIC has been built and has just begun opera- tions. The studies up to final engineering for the. Logar airport have been completed, but with subsequent large increases in the estimated costs of the airport its justification becomes more problematical, un- less the steps needed to promote large increases in tourist arrivals by air are taken. 37. Following.the completion of the first UNOTC/UNDP project in 1973, a second and more ambitious technical assistance project was prepared in 1975 which was to involve the assignment of five experts and five associate experts in a first phase of the project. The purposes of this project were to continue the technical assistance to the tourism sector provided under the first UNOTC project, to establish a hotel and tourism training center, to prepare a National Tourism Development Plan for 1976-82, to prepare an area development plan for the Bamyan/Bande Amir region and to prepare a plan for the development of accommodation capacity. The project document: was signed in November 1975, but with a reduction in UNDP resources available for Afghanistan, it has not been possible to implement the project as designed, and apart from the Project Manager, only the travel trade expert and the associate expert on tourism docu- mentation and statistics have been hired. 38. While much valuable advice has been provided by these and other technical assistance activities, it must be said that the apparent effect on the progress of the sector has 'been very small. More specifically, the improvements in the organization of the sector at the governmental level and in the training of personnel, which have been recommended re- peatedly over the years, and which are a prerequisite to the provision of improved tourist services and facilities, have not been implemented. VII. SECTOR DEVELOPMENT PLANS 39. Tourism features to only a minor extent in the Seven-Year Economic and Social Development Plan (1976-83). Five new public sector hotels are included in the plan--four of them small hotels each of 40 beds--and the fifth a-hotel of 200 beds at Bamyan. Together with other minor improvements, the total sum allotted to tourism projects in the Plan is Afs 198 m (US$4 million approximately) or less than 0.01% of total Government investment projected in the Plan period. However, other investments particularly in the development of the highway network and in aviation will have considerable importance for the development of tourism. The proposed reconstruction of the road to Bamyan, the proposed improvements to the airport at Kabul and the proposed development of the new airport at Logar would have as an important part of their justifica- tion a projected increase in tourist traffic. Other investments which will - 12 - provide additional amenities for tourists are the proposed reconstruction of the road from Sheberghan to Herat,.the Kunduz-Khanabad-Keshem highway and the Jalalabad-Asadahad highway- as well as improvements proposed for sections of the Central Route. Other- improvements proposed for minor airports, in particular at Bamyan, Mazare Sharif, Herat and Kunduz, would also provide better internal air services for tourists, though again the major justification for these improvements would be the ex- pected growth in domestic traffic. 40. Architectural drawings for the proposed hotel at Bamyan are under preparation by the staff of the Ministry of Public Works, and the site for it has been chosen. While the site commands panoramic views of the Bamyan valley and of the giant Buddhas, the architectural solution adopted does not seem to be the most appropriate and economical. Works are already under way for adapting the site configuration to the proposed shape of the structure. Consequent problems of structural safety and of dealing with the high amount of subsurface water and of modelling loose alluvial materials are in evidence at the site. Cost per room of this hotel is likely to be above US$35,000 equivalent in 1977 prices. Assum- ing an annual rate of occupancy of less than 40%, the minimum tariff per room per day would be in the order of US$50 to 55. None of the other hotels proposed in the Plan have reached the design stage, but it seems likely that by adapting the traditional designs and construction materials used in Afghan domestic architecture, it would be possible (as has already been demonstrated on a limited scale) to build hotels at a cost low enough to ensure financial and economic viability, even where seasonality factors would preclude average annual bed occupancies above 40-50% (see Annex 3). Preconditions for such returns would, however, be adequate management of the hotels and improved organization of tourist services, particularly transportation. 41. Apart from the proposals contained in the Seven-Year Plan, the ATO is proposing six projects which would involve some investment in physical facilities but mainly the mobilization of further technical as- sistance. These projects are: a) a Hotel and Tourism Training Center; b) a Tourism Master Plan for the whole country; c) a Physical Plan for the area of Bamyan/Bande Amir (recommended by Unesco in 1970); d) technical advisory services for the ATO; el management services for Afghantour; fQ a program for the renovation and development of accommodation capacity. - 13 - 42. A number of these proposals involve a continuation of past efforts and others aLppear to involve a repetition of at least parts of earlier studies. Nevertheless the proposa-ls focus attention on priority areas and if effectively implemented would constitute a major advance in the progress of the sector. In view, however, of the dis- appointing performance in the past, it is not clear that the additional technical assistance now requested would be effectively utilized with- out a strong commitment of the Afghan authorities to the development of the tourism sector. VIII. FUTURE TOURISM DEVELOPMENT 43. The Afghan Government can do only a limited amount to promote the expansion of the flow of visitors to Afghanistan who are "in transit", because the magnitude of this flow has been and will continue to be mainly determined by developments in other countries. Nevertheless the Government can help by easing customs, immigration/emigration and currency formalities, and the returns from providing incentives and facilities to encourage "transit" visitors to stay longer in Afghanistan should be evaluated. 44. The flow of business visitors will depend mainly on the develop- ment and prospects of the Afghan economy, and again there is little the tourism authorities in Afghanistan can do to encourage this traffic. 45. The market segments which appear to be most amenable to in- fluence by the tourism authorities are individuals or groups travelling to Afghanistan on holiday either as a single destination or as part of a regional multi-country tour. While the size of this market segment is not known, it appears at present to be a relatively small part of the total visitor flow---perhaps not more than about 10%. From the limited data available, it seems probable that this is a relatively affluent market segment, and one that could be expanded rather easily through moderate expenditures on promotion and contacts with appropriate tour operators in Europe:, North America and Japan. Success would, however, depend on the provision at reasonable prices of improved services and facilities to and w.thin Afghanistan. 46. Improved services would include improved domestic air and road services, improved guide services, easier visitor facilitation as well as suitable accommodation at strategic locations. In adding accom- modation, a careful evaluation would have to be made of the impact of seasonality on occupancy rates and viability. The extent to which it would be possible to influence seasonality patterns (perhaps by pricing policy) would also have to be evaluated. While, as indicated above, it seems probable that a program of investments could be devised which would yield adequate economic and financial returns, such returns would only be achieved if a very marked improvement in the management of services - 14 - and facilities could be brought about. In this connection the future role of the private sector requires careful consideration. The difficulties experienced in attempting to make Afghantour an efficient and profitable body (notwithstanding the provision of technical assistance from UNDP/ UNOTC over a relatively long period) point to the desirability of allowing private tour operators to compete with Afghantour in providing the quality of services which the international tourism trade and visitors from the higher income countries demand. At the same time, the management structure of Afghantour itself needs to be greatly strengthened to enable it to compete effectively. This might be achieved in various ways, but it could not be achieved as long as Afghantour remains an ordinary public sector enterprise subject to civil service constraints, particularly in relation to hiring and firing and salary levels. Hence a new status for Afghantour to enable it to operate commercially seems essential. To supplement the necessary legal changes, a major strengthening of the management of Afghantour is required as well as the introduction of technical "know-how." A management contract with a foreign tour operator (extending over several years) with heavy emphasis on the training of counterpart staff might be the most effective way to achieve this ob- jective. 1/ 47. Given the current levels of expertise in the State Hotel Authority, it would clearly be very difficult for the Authority to provide the standards of operation and management of new (or remodeled) accom- modation facilities required by the target market. As indicated above, judging by past experience, it is possible that the private sector could provide adequate facilities, if allowed to do so. This is not certain, however, and the level of expertise in the private sector is in most cases below the standards required. Hence it would be unwise to rely entirely on the private sector, but arrangements should be devised to allow suitable private developments in parallel with the development of accommodation capacities by the public sector. While there should, in principle, be organizational advantages in bringing all public sector 1/ Although in most countries tours within the country are organized and operated by local individuals and firms, in several African countries (e.g., Kenya) such tours are also operated by firms which may be locally registered but which are subsidiaries or affiliates of foreign companies. For example the United Touring Company which is the largest tour operator in Kenya is owned in part by UTC of Great Britain. In this way the management and expertise developed in Britain became available to Kenya, which was particularly important during the earlier years of tourism in that country. Similarly other local tour companies in Kenya are linked to associated companies in Germany which is a major source of visitors to East Africa. Such links are also important in establishing market connections. - 15 - hotels together under the State Hotel Authority, the weaknesses of that organization and the deficiencies of many of its properties are such that there is very little prospect of it becoming without major restructuring an efficient and profitable enterprise. Moreover, as a public sector enterprise it suffers from the same constraints as the ATO and Afghantour. Unless the State Hotel Authority could be restructured, therefore, it would be desirable for any new accommodation capacity to be provided by another, more commercially oriented organization. It would also be necessary to organize managerial and technical know-how to operate any new capacity. An arrangement with Intercontinental Hotels to provide such inputs as a supplement to their operation of the Kabul Intercontinental might be a relatively simple way to obtain the needed inputs, if this were acceptable to IHC. 1/ 48. In order to obtain the full benefits of any investment in new accommodation capacity and of improvements in the management and opera- tions of Afghantour, it would also be necessary to upgrade the equipment and services of Bakhtar Airlines, at least in respect of those routes which are of particular interest to tourists--principally the routes to Bamyan, Mazare Sharif, Herat and possibly Kandahar and Chaghcharan. Adequate services on these routes would provide the opportunity for tourists to travel to more distant points by air (e.g, Herat from Kabul) or to combine air and road travel over different sections of a circuit. Reliability of services is critical if the requirements of tourists visiting Afghanistan on rather tight schedules are to be met. To enable adequate services to be provided, it is essential that the management and operations of Bakhtar Airlines be improved, and that in order to establish a sound financial basis for future operations proper accounting and control procedures should be established and tariffs on unprofitable route sectors increased. 49. The constraints to the growth of tourism in Afghanistan do not lie primarily in market limitations or an absence.of attractions. The fundamental constraints lie in organizational structures and the lack of technical knowledge and managerial capacity. Sound advice on the needed organization of the sector has been offered from abroad over many years, but with little apparent impact to date. Technical assistance has been provided also, but with similarly little effect. Unless, there- fore, agreement can be reached with the Afghan authorities on the need 1/ There are a number of examples of major hotel chains which operate hotels in the capital city and smaller facilities (hotels or lodges) in other centers of the same country. For example the Hilton chain operates the Nairobi Hilton and tourist lodges in Kenya. The Regent group operates a hotel in Bangkok and a tourist hotel at Pattaya in Thailand. The Hyatt chain operates a hotel in Bali and also a new hotel in Jakarta in Indonesia. The Intercontinental chain operates several hotels in Pakistan and in Indonesia. - 16 - to overcome the organizational, managerial and technical problems con- fronting the sector and on the means to achieve this, the benefits to be gained from providing additional technical assistance in the form of advisers or capital aid for the construction of new facilities are likely to be small and much below the real costs of such assistance. 50. Were such an agreement to be reached, however, and a well conceived program to add new accommodation capacity and improved trans- port services devised and implemented, it seems likely that the numbers of visitors coming to Afghanistan, other than those "in transit" or on business, could be increased quite rapidly in a relatively short time. An increase in this market segment from about 9,000 to say 30,000 or more over the next four to five years is clearly feasible from a market point of view. Such an increase in traffic, of which a large part would be air arrivals, could be accommodated at the Kabul airport provided that the improvements now planned for that airport are implemented expeditiously. ANVEY 1 Table 1 AFGHANISTAN: TOURIST ARRIVALS BY LAND (1965-76) Country of Nationality 1965 1967 1969 1970 1971 1972 1973 1974 1975 1976 Extra-Regional France 308 1123 - 87 5,483 6,5 54 3,905 6.322 6;4S9 6,920 Germany 1,198 1,439 3,112 4,223 5,988 5,380 5,981 5,884 7,152 6,825 Italy 12 127 453 986 1,574 1,904 1,946 2,274 2,642 2,231 U.K. 913 3,626 7,228 8,240 8,765 7,287 7,745 9,132 9,972 8,731 Benelux 63 371 910 1,499 1,746 1,438 1,659 1,925 1,979 1,669 Switzerland 1'7 346 853 1,410 1,947 1,867 2,124 2,387 2,238 1,721 Scandinavia 81 407 873 1,215 2,030 1,509 1,480 1,889 1,419 1,351 Austria 112 172 374 552 535 657 872 1,135 1,234 n.a. ,.S.A. 1,415 2,2 ,1 ,75 79 ,11 6,88 5,978 57 4,48 Canada 99 308 793 1,203 1,898 1,951 2,144 2,530 1,627 1,410 Australia 247 885 1,698 1,743 2,253 2,148 2,695 3,061 3,860 3,753 New Zealand 101 248 516 563 633 571 713 971 1,037 1,012 jaoan 47 246 601 663 1,164 1,075 1,056 2,899 1,428 1,270 Other Extra-Regional 174 474 1,866 1,934 3,105 2,822 2,921 _, 354 4,013 5,492 Total Extra-Regional 4,877 12,204 27,606 34,469 45,189 40,269 42,109 49,741 50,432 44,867 Regional India 145 164 296 526 501 557 751 1,076 2,328 1,662 Iran 46 757 613 1.038 1,358 1,855 1.268 1.807 2,616 2.808 Pakistan 2,865 13,6 24,191 48,051 47,887 46,493 24,803 25,703 14,915 18,278 Total Regional 3,056 14,887 25,100 49,615 49,746 48,905 26,822 28,586 19,859 22,748 GRA%ND TOTAL 7,933 2!7,091 52,706b 84,084 94,935 8$9,174 68,931 78,327 70,291i 67,6b5 ANNEX 1 Table 2 AFGHANISTAN: TOURIST ARRIVALS BY AIR (1965-76) Country of Nationality 1965 1967 1969 1970 1971 1972 1973 1974 1975 1976 Extra-Regional France 78 412 515 1,053 1,772 2,160 2,537 2,219 2,928 2,712 Germany 213 548 804 1,249 1,536 1,640 1,535 1,273 1,425 1,924 Italy 32 127 201 257 233 510 593 468 585 563 U.K. 192 1,684 852 1,069 1,352 1,780 1,130 980 965 1,095 Benelux 18 78 141 139 162 287 309 282 306 251 Switzerland 65 108 180 410 325 594 552 537 620 756 Scandinavia 20 114 213 278 314 340 249 224 266 146 Austria 26 46 54 80 54 124 136 60 5 n.a. U.S.A. 1,153 2,613 3,502 4,817 4,772 5,459 5,901 4,391 3,941 4,768 Canada 42 128 194 300 441 459 447 264 383 437 Australia 42 96 181 329 450 466 279 288 379 435 New Zealand 10 28 47 64 113 121 88 71 88 114 Japan 23 112 185 442 545 689 594 714 844 1,052 Other Extra-Regional 97 380 809 941 932 1,219 1,347 1,046 1,483 1.783 Total Extra-Regional 2,011 6,476 7,878 11,428 13,001 15,848 15,697 12,817 14,218 16,036 Regional India 139 2,421 405 1,355 1,032 2,212 2,868 3,532 6,065 6,583 Iran 28 28 116 167 236 376 499 385 461 674 Pakistan 428 1.869 1,984 3,199 3,905 2,628 1667 1,161 98 72 Total Regional 595 4,318 2,505 4,721 5,173 5,216 7,034 5,078 6,624 7,329 GRAND TOTAL 2,606 10,794 10,383 16,149 18,174 21,064 22,731 17,895 20,842 23,365 ANNEX 1 Table 3 AFGANISTAN: -!:OUR_PRICES OF AFGHANTOUR (Prices in US$) % Increase 1974 1975 1976 1977 1974-1977 Bamyan (2 days) 1-2 persons 45 65 90 100 122 additional person 8 10 15 25 212 group (per person) 6.5 11 16 18 176 Bamyan-Bande Amir 1-2 persons 60 90 120 140 133 (3 days) additional person 10 15 20 25 150 group (per person) 8.5 15 21 23 170 Bamyan-Bande Amir- 1-2 persons 80 100 135 152 90 Salang (3 days) additional person 15 20 25 30 100 - group (per person) 12 16.5 23 25 108 Mazare Sharif-Balkh 1-2 persons 100 110 150 196 96 (3 days) additional person 15 25 25 35 133 group (per person) 13.5 18 29 33 144 Kunduz (2 days) 1-2 persons 50 80 100 140 180 additional person 10 15 15 25 150 group (per person) 8 13.5 20 23 187 Bamyan-Banda Amir- 1-2 persons 150 200* 250 290 93 Mazare Sharif additional person 25 40* 35 45 80 (6 days) group (per person) 25 33* 44 48 92 Kandahar-Herat 1-2 persons 140 250 350 410 192 (5 days) additional person 30 50 50 55 83 group (per person) 20 42 75 73 265 * for 7-day tour ANNEX 2 Page 1 AFGHANISTAN: TOURIST ROADS AND AIRPORTS 1. ROADS 1.1 Access Points The main entry points for visitors arriving by land are: (i) Islam Qala, about 120 km west of Herat, for those travelling from Europe via Teheran; (ii) Spin Boldak or Qala-i-Jadid, some 105 km south-east of Kandahar, for those travelling from Karachi and southern Pakistan; and (iii) Torkham and the Khyber Pass, some 325 km east of Kabul, for those travelling from India and Nepal via Lahore or Rawalpindi- Islamabad. These access points are connected with the cities mentioned above by A-class asphalted roads. 1/ Access from Russia is relatively simple by two asphalted roads: the Torghundi or Kuzka - Herat road (120 km), and the Saneb-Kunduz road (70 km), but tourism from Russia is almost negligible. 1.2 Circular Highway The Circular Highway from Herat to Kandahar, Kabul, Mazare Sharif and Daulatabad is a 1740 km-long paved road, providing access to the main cities, important historical places and other tourist attractions. From Herat to Kabul (1,060 km) via Kandahar the road is part of the Asian Highway and is all asphalted/concreted. From Kabul to -Daulatabad in the north the road is asphalted. From the latter place to Herat (415 km) the road has a gravel surface and is therefore very much exposed to erosion by rain and floods. The Seven-Year Plan contemplates the completion of 160 km of this portion of the Circular Highway, between Herat and Qalai Naw, at an estimated total cost of US$19.2 million equivalent. 1/ Specifications of the Ministry of Public Works for A-class roads: lOm-wide roadway, including two 3.5m-wide asphalted traffic lanes, with 100 km speed design. ANNEX 2 Page 2 1.3 Central Route This 950 km-long road connects Kabul with Herat parallel with the Hindu Kush mountain range and the eastern section of the Iranian plateau. The road has either a gravel or clay surface and, in many areas, is very dustyr and sandy. There is practically no maintenance, except on a few sections between Matak and Bande Amir, and between Herat and Obe. As tourisi: attractions, the route traverses spectacular scenery, lakes, historical monuments (as the Jam minaret), old cities and villages, and nomadic camp sites. Along the road there are no hotel accommodations of international standard. The Afghantour "Yurt" Village at Bamyan is the only accommoda- tion facility which approaches a hotel operation acceptable for tourism traffic on the entire Central Route. In Chaghcharan, a 10-room hotel is of very low standard, and at Jam a small hotel has been built of mud and bricks next to the minaret. Low standard accommodation is also provided by some private entrepreneurs at Bande Amir and Obe. The camping areas, with military tents established by the ATO at Farsi, Sharak, Chaghcharan, Lal, Panjaw, Bande Amir and Bamyan lack appropriate and hygienic toilet facilities. Restaurants are not available. Food in most of the larger villages is served by local "restaurants," but none -of them provide ac- ceptable services for regular tourist traffic. Gas stations are only available in three places along the route. Among the new projects contemplated in the Seven-Year Plan is the partial construction and asphalting of the Matak-Bamyan-Bande Amir section of the Central Route, totalling 236 km. 1.4 The Matak-Bande Amir Road A feasibility study for this road is currently under preparation by Motor Columbus Consulting Engineers for the Road Construction and Maintenance Department of the Ministry of Public Works. Improvements recommended by the consultants include (i) the upgrading to B-2 class (additional bituminous wearing course) the section between Matak and Bamyan, with the exception of expensive sections at Shibar Pass and at the Shekari Gorge (12 km in total.) which would be upgraded to C-class only; and (ii) the upgrading to C-class (6 m carriage way plus 1.0 to 1.5 m shoulders without asphalt) of the section between Banyan and Bande Amir. The pro- posed improvements are estimated to cost US$50.7 million by the con- sultants and US$35.0 million by Public Works. The consultants' economic analysis reveals a low internal rate of return of 7%. In order to in- crease the economic viability of the project, the Government and the Bank are investigating if further reductions of construction costs can be obtained. The main benefits are expected to originate from (i) increased agricultural output, (ii) avoiding losses from spoiled products, (iii) savings -in trucked livestock, and (iv) tourist access throughout the year to the historical sites of Bamyan and the Red City, and to the Bande Amir lakes. In addition, various other benefits are expected, such as higher income of local population, reduced transport fares by im- proving transport competition, reduction of dust pollution, and improve- ment of the social conditions of the population (medical care, education and culture). ANNEX 2 Page 3 1.5 Other Tourist Roads From Pule Khumri to Kunduz the road is relatively short (110 km) and asphalted. Kunduz is a tourist attraction, and a market center frequented by tribesmen. From Kunduz an asphalted road goes to Mazare Sharif. The Seven-Year Plan contemplates the completion of the road from Kunduz to Keshem (136 km) via Khanabad and Taloqan, and the partial construction of the road from Keshem to the city of Faizabad (109 km). Among the new projects, the Plan includes the construction of the first access road to the Nuristan region, one of the most attractive tourist areas of Afghanistan. 2. AIRPORTS 2.1 Kabul Airport Afghanistan has only two international airports, Kandahar and Kabul. The airport at Kandahar is no longer used by international air- lines. The Kabul airport is thus the only port of entry for visitors entering the country by air. The Kabul international airport is inadequate for large air- craft operations and unable to cope with today's traffic (particularly during the peak tourism months). Mountains surrounding the Kabul Valley are obstructions to international air navigation. The runway is wrongly oriented (E-W), so on some occasions aircraft are landing with cross winds exceeding 15 miles per hour, the maximum wind velocity for safety. In building its rigid-pavement surface, spacing between joints was not made with sufficient consideration to the subgrade constraints and the extreme climatic conditions, giving as result of expansion differences of 5 cm or more in heights between runway plates. The runway lighting is a multi-switched operation not controlled from the tower. The terminal building is too small for the number of passengers and its water supply and heating systems and elevators are obsolete. The Seven-Year Plan contemplates the improvement of the Kabul airport for a total estimated cost of US$3.6 million (including con- tingencies). The improvement includes the resurfacing of the runway and taxiways with flexible pavement; building a new airstrip N-S for small aircraft; a new lighting system in the main runway controlled by the tower; new stand-by power system (2 engines of 200 kw each); new central heating, air conditioning and water supply systems for the ter- minal building; spare parts for the elevators--or new elevators; a new DVOR and an extended VHF system (to be installed during 1977); and new fire fighting equipment. ANNEX 2 Page 4 2.2 Logar International Airport The feasibility study for the new airport at Logar, some 45 km from Kabul, was completed in October 1974 by Montreal Engineering Co., Peat, Marwick and Partners, and the Parkin Architects Planners. The master plan for the airport was approved in 1975. In their report, the consultants conclude that "unless some unforeseen events change the present,development potential of Afghanistan, the economic feasibility of a new airport facility will depend to a large extent upon the assump- tions of future tourism development." Only a marginal contribution to both industrial and agricultural development is expected from the con- struction of the Logar airport, and "without a relatively large increase in air tourism, the investment in a new (airport) facility cannot be defended on economic considerations alone." Subject to the availability of financial resources, the Seven- Year Plan contemplates the construction of the first phase of Logar airport, estimated in 1976 at US$45.0 million, including access road and staff housing facilities. Preliminary commitments for US$12.0 mil- lion in foreign financing have been obtained. The Government has al- located US$6.0 million equivalent as counterpart financing and CIDA has promised a contribution of US$4.2 million for final design and super- vision once full financing of the airport has been secured. 2.3 Other Airports The Seven-Year Plan also contemplates.improvements in the Kunduz, Mazare Sharif, Herat, Bamyan, Chaghcharan, Kandahar and Faizabad airports. These improvements include extension and resurfacing of run- ways, terminal buildings, installation of navigational aids and communi- cation equipment, firefighting facilities and flight checking.. The total amount of the improvements has been estimated at US$8.1 million equivalent, before contingencies. ANNEX 3 Page 1 AFGHANISTAN: PROPOSAL FOR TRADITIONAL HOTELS The transformation of old forts and the adaptation of tradi- tional "yurts" could contribute to solve the problem of providing accom- modation for tourists on a short stay basis outside Kabul. The following exercise provides tentative cost estimates for both types of traditional hotels. 1. Fort Hotel The mud fortress, a traditional structure in the Afghan country- side, could be transformed into a tourist hotel with an investment of about US$20,000 per room. Inside a reconstructed fortification, a new independent structure could house 48 double rooms and 4 suites, restaurant for 60 persons and kitchen facilities. The new 2-storey structure would be built around a central patio of 32 x 32 m. The following cost estimates for building, furniture, fixtures and equipment are based on prices as they stood in early May 1977. Cost of land acquisition (or the acquisition of an old fortress) has not been included. Cost of fixed equipment--as part of "building"--includes central heating and air- conditioning units. Afs. (000) US$ (000) Land - - Construction 24,200 484 Site development 2,200 44 Building 22,000 440 F., F. & E. 9,000 180 Professional Services 3,300 66 Staff Training and Pre-Opening Expenses 1,300 26 Project Administration 1,200 24 Working Capital 2,000 40 Baseline Cost 41,000 820 Contingencies: 11,000 220 Physical Increase 3,300 66 Price Increase 7,700 154 TOTAL COST 52,000 1,040 ANNEX 3 Page 2 2. Yurt Hotel The tyurt" is a circular, removable dwelling popular in the northern half of Afghanistan, where it is used both by nomadic herders and by semi-sedentary peasants. The interior of the yurt is beautifully decorated with traditional carpets on the floor and bands of textiles and tassels hanging around the inside perimeter. The proposal to employ yurts as hotel bedrooms provides for the following changes in the traditional yurt: (i) a permanent, thermally insulated, brick masonry structure, including the ceiling vault, with exterior felt covering; (ii) Afghan terrazzo tile floors; (iii) grouping three yurts to a bathroom unit (each yurt would have an individual bath- room with shower, w.c. and washing facilities);,(iv) connecting the groups of yurts to a central heating system; and (v) installing individual air- conditioning units. The following estimates for a hotel with 24 yurts include the cost of building, furniture, fixtures and equipment. They are based on prices as they stood in early May 1977. Cost of land acquisition has not been included. Cost per room is estimated at US$13,300. Afs. (000) US$ (000) Land - - Construction: 5,900 118 Site development 700 14 24 yurts 4,000 80 Central facilities 1,200 24 F., F. & E. 4,800 96 Professional Services 1,100 22 Staff Training and Pre-Opening Expenses 500 10 Working Capital 600 12 Baseline Cost 12,900 258 Contingencies: 3,100 62 Physical Increase 1,100 22 Price Increase 2,000 40 TOTAL COST 16,000 320 By increasing the number of yurts the unit cost can be reduced (e.g., in a 42 yurt hotel the cost per yurt is estimated at US$11,500). 1BRD 10790 ю 55° �о° �� FEBFUAвY19'!l / � /. 1 ��> � , � U 5 5 R. _ <,, о q�`9 . ' �' _ � �. Увгкяалlв �.. � �/ l�" r _�А � �пт ' � � ��� 1 � . � . �� к1еп�FГ�(;п �в " . -"'�^� ^ Fqlznвao 1 � � � ;' � � `'. � � reta к `� �' к"'п _ мг° � li � �: h,b�,\ � � Р � �и. 1 , 1 "TJ���C�.J \ R� � �л`дими� АQгла � Г i S�P cZi Г�+ ��_ Ф� � ��: �' l � • -. � S. f � п �� i1 \ � Ръ�Р У^Т'ioe киио з1 а`°', � `��/ О ' �А � � Г .-� � 1 � - `. 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