South pacific business environment

Basic Information and Assumptions

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  The Copper mine has a life of 10 years.
  
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  The capital cost of establishing the mine is $300 million and the construction period is two years at $150 million per year.
  
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  Annual revenue from the mine is estimated to be about $500 million based on the current world market price of copper. A high estimate is $650 million per annum and a low estimate based on low copper price is $350 million per annum.
  
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  Annual total operating costs including salaries and wages are $250 million.
  
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  In the 5^th year of operation the processing plant will require a major upgrade at an estimated cost of $50 million.
  
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  At the completion of the project the company will be required to restore the mine site and demolish the processing plant and other buildings as well as plant trees on the mine site. This restoration is expected to cost $ 30 million in 2009 dollars.
  
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  The mine is an open-cut mine and the ore is processed at the mine site then transported to Port for export.
  
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  The environment damage from the mine is estimated to be $680 million for the life of the mine. There are complex environmental impacts
  
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  The mine will have substantial social impacts and social costs are estimated to be $450 million for the life of the mine.
  
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  The mine will generate 500 new jobs at the mine-site.
  
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  The mining company will pay company tax, a mining royalty and all other taxes and government charges.
  
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  If the project goes ahead, the Government will need to upgrade the roads at a cost of $40 million and heavy mining truck use of the road will require extra road and bridge maintenance cost estimated to be about $25 million per year.
  
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  Land owners will receive a royalty of 5% of mine revenue.
  
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  A mine workers camp/village will be constructed close to the mine at a cost of $4 million.
  

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  Formulate the objectives of the Policy and clearly summarize them.
  
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  Summarize the performance problems of public enterprises.
  
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  Identify and list the policy measures available to the National government.
  
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  Select a number of policy instruments.
  
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  Describe the policy implementation process.
  
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  Describe how the policy can be monitored and evaluated.
  

The main features of the project are as follows: Pacific Beach Resort will be a world class integrated tourism resort on 20 hectares of land. Government has already constructed a high quality access road to the resort location and electricity and piped water have been provided by Government at a cost to the Government of $70 million. The resort will have a variety of recreational and resort facilities located within the white sandy beach setting, sited on the Island's East Coast.

The resort will include:

•		A 5-star resort hotel of 200 rooms located at the beach;
	A marine for 200 yachts
•	An 18-hole championship golf course;
•	100 Residential and villa blocks of land for sale

The total project cost is $400 million. Private sector investors are investing $200 million and the National Provident Fund is investing $200 million in an equity investment is shares in the private company Pacific Beach Holdings. The project will promote environmentally sustainable development. It will also draw inspiration from traditional South Pacific architecture with traditional roof styles offering protection from sunshine and rain. There will also be large verandas, terraces and courtyards.

Sports facilities will include swimming pools, tennis courts, archery facilities, a multi-sports area accommodating volleyball, basketball and similar activities, and a well-equipped fitness centre. Marine sports activities will include scuba diving, snorkling, sailing and windsurfing.

Tasks

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  Identify all relevant risks and Construct a risk matrix
  
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  Assess each risk in terms of probability and consequences (impact) and prioritise from highest to lowest
  
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  Discuss some control practices for each risk for effectiveness and cost
  

The new policy must address issues of concern about some of the negative impacts of tourism on the Pacific Island citizens. These include:

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  Increase in vehicle and motor bike traffic congestion and road safety issues
  
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  Environmental impacts including: disposal of hotel garbage and impact of sewerage effluent on the lagoon.
  
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  Impact of new tourism accommodation projects on land use and reduction of fertile land for agriculture
  
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  Impact of tourism on public infrastructure demand particularly electricity and water consumption
  
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  Social and cultural impact of migrant low income hotel workers recruited from other Pacific Island countries
  
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  Number of tourists exceeding the carrying capacity of the local physical environment
  

List some practical green business measures that could be implemented in 2010 to reduce that carbon impact of tourism in the Pacific. What new business opportunities are likely to become profitable due to a world-wide movement to sustainable development and carbon footprint reduction?

What policy measures would you recommend? Explain why your recommended policy measures are likely to be the most effective measures for achieving the government policy objectives.

The chairman of the board has asked you to prepare a five year corporate plan. He has informed you that the company has assigned NZ$20 million to upgrade the facilities of the hotels. The company is currently making only 6% return on investment. The average annual room occupancy rate is as follows:

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  Outline the processes and sequence of activities that you recommend should be undertaken to prepare the corporate plan.
  
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  Prepare a checklist of criteria that could be used to assess the quality of the corporate plan