Empty slopes

April 11, 2021

Potential impact of the ruling that resulted in a closure of the Malam Jabba ski resorts is huge

The management of Malam Jabba ski resort, the only international-standard skiing facility in Pakistan, closed the resort last week after the Peshawar High Court’s Mingora Bench, in an interim order, declared its entry fee unlawful and stopped its collection. “We approached the court in public interest and to protect the rights of residents of the area. The company should be barred from charging an entry fee,” says Akhtar Munir Advocate who filed the petition. According to the company, a group of lawyers visited the resort a few weeks ago and refused to pay the entry fee. “When the management didn’t let them enter the resort, they went and filed a petition in the Mingora Bench of Peshawar High Court,” says Hussain Badshah, the security in charge.

The Samson Group of Companies, which has the resort’s lease, says that in the absence of the income generated through the fee – permitted under the lease agreement – it is impossible for the Company to continue to provide the services at the resort. One of the most famous tourist spots in the country, the resort houses an international standard ski slope, a chair lift and the country’s longest zip-line. The company employs more than 500 people to manage and maintain the ski resort. “We have no option but to close the resort till the company can come up with an alternative business model. We regret any inconvenience to our patrons,” reads a press release issued by the company.

Perched above the Swat valley, Malam Jabba was seized by the Taliban in 2006-07. Skiing was then denounced as “un-Islamic” and banned. The resort had had a chairlift and a lodge with 52 guestrooms before the facility was set on fire by the Taliban in June 2008.

After the Taliban fled the area, in 2010 USAID-Pakistan prepared a report, Malam Jabba Lift design-build project on site condition assessment and procurement requirement, in a bid to rebuild the resort. According to the report the resort required a massive effort for the rebuilding process to begin as the main lodge as well as the surrounding service buildings had been destroyed by fire. The report said that the resort’s water supply, sewer, and electrical services had all been destroyed, at least partially.

The report said the ski slope was inappropriate for all but expert skiers. “By Western standards, Malam Jabba as a ski resort is of extremely poor quality… It is recommended that an international donor be extremely cautious about funding a single element of the resort… such as the lift [as it] does not guarantee the construction of other elements required for a fully operational resort”.

In 2014, the government of Khyber Pakhtunkhwa (KP) leased the resort out to the Samson Group of Companies on a build and operate basis for 33 years. Clause 18 of the lease agreement signed with the government specifically gave the company the right to charge an entry fee. The group says it has invested around Rs 3 billion on developing the services and pays the government a yearly fee.

Mohammad Tahir Qasimka, a legal advisor for the company, says the entry fee was a major source of revenue for the company. “The company invested over Rs 3 billion in the area at a time when nobody was ready to invest in Swat. Now that the area has become a hub of tourism through the company’s efforts some pressure groups in the area are using arm-twisting tactics to pressure the company into winding up its business”. He says no government department has helped the company run its operations smoothly. “Instead, they encourage arm-twisting tactics by locals and have used the opportunity to blackmail the company”.

Qasimka says that the resort directly employs over 500 people. Indirectly, it benefits thousands of people, including those in food, construction, hardware, transport, carpentry, marketing and printing businesses. “Over 90 percent of the staff working at the resort belongs to Swat”.

Chaudhry Fawad Hussain, the federal minister for science minister and technology, tells The News on Sunday (TNS) that the Supreme Court of Pakistan has called judicial overreach a violation of the judges’ oath. “The judges should refrain from making quick orders in economic matters. In the past, we have seen the consequences of judicial rulings in cases like the Steel Mills privatisation. Some of these decisions have cost Pakistan billions of rupees.” He says that the matter should have been resolved keeping in view the lease agreement between the company and the government. “We need to facilitate investors in tourism. Please do not discourage investment.”

In 2017, the first international ski championship, Malam Jabba International Alpine Ski Cup, was held at the resort. Sixty skiers — 50 men and 10 women — from nine countries, including Pakistan, Morocco, Slovakia, Sri Lanka, Greece, Afghanistan, Turkey, Ukraine and Tajikistan, participated in the championship. “Holding international ski events is a very expensive affair. The ski slope needs to be maintained at a certain standard required by the International Ski Federation and international players of a certain ranking need to be part of the event,” says a senior official of the company.

He says the company needs to invite expensive international consultants every month to ensure that the slope complies with the International Ski Federation regulations. Snow groomers are not only expensive to buy but also expensive in operation. “A Pistenbully costs Rs15 million. The driver is trained by Austrian experts and if it stops working we have to fly an expert from Austria for repair,” he says.

Attracting international players too is expensive as it is not commercially viable for them to participate in skiing competitions in Pakistan. “The prize money is around Rs 200,000 which does not even cover the airfare. We offer them a participation fee based on their ranking, business class air travel and five-star hotel stay at the resort. An international skier costs us between 6,000 and 10,000 euros (Rs 1.2 to 2 million). Tourism in the area has not grown organically, we have invested millions of rupees every year. These events do not only market the resort but also the entire area and help promote a soft image of Pakistan. This is where the entry fee helps.”

He says the company has been facing threats from local pressure groups since it started its business. “The number of tourists to Swat has increased manifold ever since we started arranging international events. The local economy has benefited from our efforts but no government department is ready to support us. They want us to resolve the issues in local jirgas. It becomes frustrating at times.”

The closure of the Malam Jabba resort has impacted tourism in the region. “Five out of eight of my tourist groups have cancelled their trip to Swat after the ruling. Hardly any tourists will come to visit only Kalam in Swat” says Azhar Uddin, a Swat-based tour operator. “The resort is the main tourist attraction in Swat. If it is closed for another week or so, the damage to tourism in the region will run into billions,” he says.

Javaid Khan, in charge of the Malam Jabba police station, says, “The room occupancy in Malam Jabba hotels dropped by a third last week. The local economy has been affected.” He says, however, that local traditions have deep roots. “Locals have their grievances. Police cannot solve all the issues.”

Arif Aslam Khan, chairman of the Shangrila Resort at Skardu says that charging an admission fee is a common revenue-generating strategy for resorts. “The pressure groups are a major problem. They use many tactics to demoralise investors. The government should support investors in the tourism sector before it is too late,” he says.

Special Assistant to Prime Minister and National Tourism Coordination Board (NTCB) Chairman Sayed Zulfikar Abbas Bukhari has tweeted, “Unfortunate to see one of our best resorts close down at the peak of tourism season. This upsets many people’s plans just days away from #Ramazan... the last thing Pakistan’s booming tourism industry needs right now is disruptiveness.”

Aslam says, “[such] tweets alone do not provide a solution on the ground. The government needs to take concrete action to support investment in the tourism sector.”

The writer is an Islamabad-based journalist, researcher and media trainer. A former Daniel Pearl/AFPP fellow, he shared in The LA Times’ 2016 Pulitzer Prize for breaking news. He tweets @AounSahi

Empty slopes