Historical excursus in the history of tourismPast III Development of the regulatory and legal framework. After acquisition of independence, Uzbekistan began taking active steps toward the elaboration and introduction of a sound regulatory and legal framework for a sustainable development of tourism, including the encouragement of private entrepreneurs to set up in the tourist sector. In practice, these two processes were inseparable. Take, for instance, a resolution of the Cabinet of Ministers of the Republic of Uzbekistan aimed at improving tourist infrastructure. This is bound up with the development of small and private businesses, through which all programming documents are implemented. Some 60 per cent of the documents governing the tourist industry were approved in the period 1990-1997, when the foundations of a market-oriented economy were laid down in the Republic. In the second period, the number of tourism-related regulatory and legal documents reached 30 per cent. Since 2003, the Uzbek Government has passed 10 per cent of all documents that constitute the regulatory and legal base for carrying out activities in the tourist sector. Needless to say, the documents approved in the first period had the most important implications for the sector as a whole, by providing a precise definition of the national tourism model and formulating the major directions of its future progression. The period 1998-2002 can be classified as a period of re-orientation, when the earlier approved fundamental documents were amended and supplemented to meet new requirements and challenges. Re-establishment of state ownership rights and privatization. Tourism was one of the sectors, where re-establishment of state ownership rights started to unfold earlier than in other industries of the Uzbek economy. The process was triggered by the January 21, 1994 Presidential Decree, “On measures to further intensify economic reforms, to ensure protection of private property and to develop entrepreneurship”. The document allowed to sell, on a competition basis, commercial and servicing enterprises, together with the land plots adjacent thereto, to legal entities and physical persons, including foreigners, without the requirement to declare the source of money funds they use to privatize these enterprises. The Government was commissioned to guarantee that enterprises involved in trade and services, whose construction and creation is financed by private entrepreneurs, are located in the most prestigious parts of towns and populated areas. Additionally, the Presidential Decree stipulated the granting of all necessary privileges, including credits and government guarantees, to legal entities and individuals, with corresponding resources and possibilities being provided by the Government for the latter to operate successfully in the tourist sector. According to experts, this document contributed to a further reinforcement of market infrastructure in the tourist industry. · the Interim Board of Directors in the town of Bukhara (construction); Investment and crediting. The Government of the Republic of Uzbekistan views tourism as the most promising industry. Evidence of the importance it attaches to this sector is reflected in the fact that tourism is included in the nation’s economic development plans and programs. The Resolution of the Cabinet of Ministers of the Republic of Uzbekistan, “On issues surrounding the organization and performance of the Private Entrepreneurship and Small Business Support Foundation (Business Fund)” dated July 26, 1995 contained a provision that in the tourist sector, banks extend credits on preferential terms by implementing credit lines opened by the Business Fund, which, in turn, uses both its own money funds and attracted resources to finance the realization of investment projects by small and medium-sized enterprises. The credits are to be repaid within 10 years, with a grace period ranging from 2 to 5 years, depending on the term fixed for recoupment of one or another projects. The interest rate on credits allotted on preferential terms is non-fixed. Instead, it is specified by the Business Fund in coordination with the Finance Ministry of the Republic of Uzbekistan. The hotel business proves to be one of the most attractive sectors for domestic and foreign investors. In the November 22, 2001 Resolution of the Cabinet of Ministers of the Republic of Uzbekistan, “On the Investment Program of the Republic of Uzbekistan for the year 2002”, the total amount of investments and credits provided against government guarantees to the Uzbektourism National Company was estimated at US $29,16 million. Of this sum, US $22, 8 million was appropriated for the construction of President Hotel in the town of Samarkand, and the remaining US $6.36 million – for the construction of Khorezm Palace Hotel in the town of Urgench. Moreover, the Uzbek Government earmarked 1 billion Soum toward the realization of the Charvak – Cimghan Area Development Project. In keeping with the 2004 Investment Program approved by the Uzbek Government, the Hypo Wereins Bank of Germany extended a US $6 million credit for the construction of a hotel in the town of Shakhrizabs. It was planned to implement half of the amount in the course of one year. The Government of the Republic of Uzbekistan included a projects to complete the construction and equipment of the Chorvak Oromgokhi health-improving center located in the Tashkent Province in the list of priority investment proposals. Valued at US $27.94 million, the center is now popular with Tashkent inhibitors and foreign visitors alike. Experts think that its outfitting with modern services and utilities will make it possible to improve the quality of services offered there and to shape the image of the center as one of the most attractive regional tourist destinations of Uzbekistan. State investments to the tune of 500 million Soum will be directed to the reconstruction of the old part of Samarkand, whose marvelous historical monuments generate a constant inflow of overseas and domestic tourists interested in ancient architecture and national crafts. The Uzbek Government intends to earmark US $50 million needed to develop and equip rail links connecting Uzbekistan and Afghanistan, and thereby to restore transport communications between the ancient cities of the two states. Undoubtedly, this will not only ensure a greater degree of political and economic stabilization in the region, but also augment tourist interest for Central Asia. Road infrastructure plays an essential role in the development of the Great Silk Road Project. In a move to step up the fulfillment of its far-reaching plans and programs, the Government has earmarked the wherewithal to the tune of 5 billion Soum - for the construction of a highway Andijan – Tashkent – Nulus – Kungrad – Beineu; 7.5 billion Soum – for the construction of small-scale ring road in Tashkent; and 17.5 billion Soum – for the reconstruction of a number of major motor-roads currently in operation, including 5 billion Soum required to upgrade the Tashkent – Gazalkent – Charvak section. The International Bank for Reconstruction and Development has provided a US $29 million loan to the Uztranssanoat Association towards the realization of urban transport development project. The Tashgorpasstrans State Association has received a US $$38.1 million credit to purchase 304 Mercedes-Benz-Conecto 0345 buses. For Uzbekistan, seeking to intensify its export activity and tourism, aviation is a priority sector. The National Air Company, Uzbekiston Khavo Yullary, has acquired, with financial support from the Eximbank of the US and the Socijete Generale Bank (France), two Boeing0767-300 jets for a total of US $181.36 million. Since airports are the country’s air gates, passenger flows are highly contingent on their performance. Using the loans for a total of US $2.3 million extended by the European Bank for Reconstruction and Development, modernization of Tashkent Airport will be continued. Baerishe Hypo Wereins, a German bank, and the Socijete Generale Bank of France, have given Us #15.9 million and US $19.8 million in loans, respectively, to meet the costs of reconstruction and expansion of Navoi Airport. The hotel sector and transport services. By 1996, the total accommodation capacity of domestic hotels, tourist centers, campings and other installations incorporated in the Uzbektoruism National Company, could provide accommodation to 8.137 tourists. Given their average annual utilization rate of some 67 per cent, this indicator reached 5,452, of which only 2,579 rooms were in line with international standards. According to sociological studies, however, 50 per cent of demand for tourist accommodation in Uzbekistan was met by hotels and other similar facilities run by other ministries and departments. Overall, they provided approximately 9,000 rooms, of which only 1,076 were up to international requirements. To satisfy demand for accommodation on the part of foreign tourists on their visits to the country, it was necessary to refurbish the available material base (some 7,518 rooms) in accordance with internationally accepted standards, to construct new hotels with an aggregate accommodation capacity of 15,000 rooms by the year 2000, as well as to develop the private sector’s accommodation facilities. Uzbektourism signed a contract with Gordial Tours & Cargo for the supply of 10 motor vehicles for a total of US $1.413 million. In 1997, the company bought 6 comfortable buses valued at US $847.800. To facilitate the realization of the projects valued at US $51.2 million, the Tashkent Khokimiyat set up 4 joint ventures with the Turkish firms referred to above. Created on the basis of the hotel complexes Dustlik, Tashkent, Rossiya and one incomplete hotel, these enterprises were designed to ensure their reconstruction, erection and further exploitation. These included Khak Sel JV (established together with Ay-Sel, on the basis of the former Tashkent Hotel; Ipak Yully-Tourism Invest JV (set up together with APEAC on the basis of Dustlik Hotel); Grand Mir JV (set up together with the Demir Group on the basis of Rossiya Hotel) and Ay-Sel Invest JV (founded together with Ay-Sel on the basis of Ay-Sel Hotel). At the same time, contributions made by the Turkish firms to their charter capital were mainly in the form of money funds, whereas the Tashkent Khokimiyat contributed hotel edifices and land plots adjacent thereto. The projects were financed our of credits extended by Turkey’s Eximbank to the tune of US $25.2 million, a US $7.2 million loan from the European Bank for Reconstruction and Development, plus resources from the joint ventures’ charter funds for a total of US $18.8 million. All the credits were secured on liquid property owned by the newly established enterprises and their founders, with the subsequent mortgage of the hotels’ buildings to the banks upon completion of their construction and reconstruction projects. After their refurbishment was finalized, all the hotels, enjoying in sum 700 rooms, were handed over to foreign operators. In particular, Tashkent Hotel, reconstructed by Ay-Sel, was managed by France’s Le Meridian. Management of another hotel built by Ay-Sel was carried out by the American company, Radisson SAS. The Turkish company, Emsas insaat turizm ticaret AS and the Tashkent Khokimiyat set up a joint venture, called Premier International Turan, to be involved in reconstruction of Dustlik Hotel. The reconstruction projects was valued at US $16.8 million. The joint venture’s charter capital, created by the founders on an equal footing, totaled US $6.8 million. The Turkish party contributed money funds, while the Uzbek counterpart made its contribution in the form of the hotel’s premises together with an adjacent land plot. Reconstruction of the hotel domiciled in the center of the Uzbek capital city started in 2002. The entire duration of the reconstruction project was 2 years. After its completion, Dustlik Hotel was conferred a 3-srat hotel status. Nowadays, it is known as Dedeman Hotel. The funding towards this reconstruction project was provided out of the joint venture’s charter capital and a credit allotted by Turkey’s Eximbank. Built as far back as 1969, the hotel consisted of two 9-storeyed edifices, with a total number of rooms reaching 450. With its reconstruction having been finalized, the hotel’s administration seeks to attract a foreign operator for management purposes. According to estimates, the project’s costs will be repaid in five years. The hotel complex will be well-positioned to service some 30,000 visitors a year. The project’s fulfillment will take 18 months. To ensure its successful implementation, Veno GmbH plans to create a joint venture on a par with the Surkhandarya Province Khokimiyat. The construction project will be financed by credits to be extended by German banks for a total of US $19 million, as well as by the enterprise’s own money funds. In 1997, Inpro GmbH reconstructed Shodlik Hotel in Tashkent, with the project’s total value coming to DM 17.6 million. For now, this hotel, whose full name is Shodlik Palace, is managed by SRS, a German operator. The cost of this project will be met by the joint venture, which will use it’s the resources from its charter capital, plus a US $12.9 million credit supplied by Turkey’s Eximbank, with the term of repayment fixed at 7 years. Besides, the Goskomimuschestvo Committee of the Republic of Uzbekistan plans to sign an agreement with the Turkish counterpart on the sale of the Uzbek side’s US $3 million share in its charter capital within a 5-year period following the completion of the hotel’s reconstruction project. © Copyright: Алишер Таксанов, 2008.
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