WILL the US-funded compensation programme for Swat’s militancy-hit hotels help revive the local hotel industry while its representatives are questioning the flawed mode of grant distribution?

The lack of coordination between the industry and the Firms Project and the controversy over the categorisation of hotels through an “incorrect survey” may not serve the purpose for which the funds are being provided, complain hoteliers. The USAID media advisor says the project managers are ready to review the survey if there are still some reservations over it.

Zahid Khan, president of All Swat Hotels Association (Asha), welcomes the $4.5 million help for the Swat hotel industry but thinks that the programme would not revive the tourism industry.

He criticises the survey and categorisation of hotels. “The categorisation is the basis of distribution of money and hotel accessories. The categories A (3 star hotel), B (2 star) and C (1 star) will be provided Rs0.65million, Rs0.3million and Rs0.11 million in cash respectively as compensation. Each hotel will also get accessories worth Rs1mn, Rs0.85mn and Rs0.51mn in that order. But the categorisation of hotels by the Firms Project was flawed as many hotels have been assessed wrongly. It has been conducted on the basis of favouritism. And the coming phase of offering hotel paraphernalia is also flawed,” Khan complained.

“A brick and a cement bag, for example, that cost Rs9 and Rs300 in the market have been projected at Rs27 and Rs690 respectively. The prices should be brought down and the hoteliers should be asked to take their dues,” he said.

Also, it seems that hotels have been categorised on the basis of number of rooms and status of the building and not on the basis of losses suffered by each of them because of militancy and floods.

Mr Khan added that though the programme was started with around $4.5 million, much of the money was allegedly being used for the security, transportation, remuneration and other expenses of the project staff.

“Initially the hotel association was taken on board but was kept aloof from the survey. We have sent our views to the Firm Project but our reservations have not been addressed. The survey needs to be reviewed for fair distribution of the compensation amount. There should have been close coordination between the surveyor and the association,” he added.

Media advisor of USAID Shahzad Badar said hotels were categorised in line with the Pakistan Hotels and Restaurants Act of 1976 and other relevant laws/directories.

Asha had provided a list of 22 hotels which in their opinion were neglected, misclassified or incorrectly rated. All hotels were accounted for, necessary corrections were made and subsequent working grants were issued to them, he said. “On September 16, 2010, we provided the hotel association with complete responses and justification for each.

However, hotels owned by government, hotels converted to other businesses during the census period and those who didn’t participate in the census were left out as they didn’t meet the requirements. Some of the hotels were occupied by the army and the surveyors were not allowed to collect complete census data of these hotels,” he said.

He said the question of favouritism by the surveyor didn’t arise as the survey was completed before the grants programme was even designed or known.

“The Firms Project had kept the hotel association abreast of the survey and resultant grants to hotels. Asha had promised its support for the successful implementation of the programme. The president and office bearers of Asha participated in various programme activities from May to December 2010,” he said.

“The Firms Project is mandated to work with the provincial government and is taking their guidance on the best means of restoring the hotel industry in Swat and bringing revenue back to the area,” he said.

As to the ‘inflated’ security, lodging, transportation and remuneration expenses of the project personnel, Mr Badar said Firms Project had been implemented in accordance with the scope of work and budget approved by the USAID.

“The operational cost, including transportation and remuneration expenses of staff and their security arrangements, was kept at reasonable rates so that the bulk of money could be spent directly on revitalising tourism in Swat,” he added.

Mr Badar, however, failed to specify as to how much of the money was estimated to be consumed by the project’s staff and how much would be left for the hotels.

As far as prices of items in the survey forms are concerned, he said, the average costs on these include transportation costs for hotels located in Swat Valley including Kalam. These are for the purpose of estimation only.

The actual cost of each item and their transportation cost will vary from hotel to hotel based on their distance from the location of vendor’s shop,” he added.

He agreed to review the survey if there were any reservations on inclusion or rating of hotels. “The Firms Project intends to update the hotels census/survey soon to include all such genuine hotels that were left out in the first phase due to their unwillingness at that time or due to an oversight on the part of surveyors and to capture post-flood updated information of Swat hotels,” he clarified.

According to an estimate, the tourism industry in Swat suffered a loss of Rs8 billion in last nine years in various tourism dependent sectors like hotel, transport etc.

Revival of tourism in Swat is pivotal to rehabilitation of people there as millions directly or indirectly depend upon the sector but it requires robust funding to build the tourism infrastructure and improve law and order.

With the government hotels and motels, like the Malam Jabba PTDC hotel also destroyed or deserted, are not eligible for USAID compensation, he said.