The financial implications of the development plan have been examined and demonstrate that the investments in general as well as the development of specific components are viable and sustainable. The evaluation is based on an overall evaluation of:

• Investment costs,
• Estimated profit to cover financial costs and risks,
• Estimated pay-back period, combined with
• Sensitivity and sustainability expectations.

Evaluations have been made for the project as a whole as well as for major project components. All calculations are based on 2004 prices. It must be stressed, however, that the present level of study does not constitute a full pre-feasibility analysis and that further more detailed studies will require to be undertaken.

Investment Summary

In the fully developed situation, assumed to be by year 2020, the total investments will be about RMB 7.3 Billion, corresponding to about $US 885 million - according to Table 8.2. The Start-up phase by year 2010 will require investments of about RMB 3.3 Billion in Commercial Components and RMB 0.5 Million in infrastructure corresponding to a RMB 3.8 Billion corresponding to about $US 500 million as illustrated in table 8.1.

Investments Year 2010 by Components (RMB Million)

Total investment by major development component is set out below in table 8.2. The major increase is in respect of the hotel and accommodation component where investments have increased by nearly 3 Billion RMB from 1.5 Billion to 4.5 Billion.

Employment Impact of the Proposed Tourism Development

Total investment by major development component is set out below in table 8.2. The major increase is in respect of the hotel and accommodation component where investments have increased by nearly 3 Billion RMB from 1.5 Billion to 4.5 Billion.

Total Investments Year 2020 (RMB Million) by Main Components

Viability Summary

Table 8.3 provides an overview of the Investments, Revenues, Contribution and estimated Payback periods. The overall investment analysis shows that the project is highly viable. The viability conclusion is that the 7,3 Billion RMB to be invested by year 2020 will be highly viable. The commercial investments will, on average, be paid back within a 4.3 period when the project is opened. When the project is fully developed, estimated at year 2020, the payback period will be reduced to 2.5 years. This exceptionally high viability period is due to the special concepts and strategies that make this project different from other projects in the region.

Viability of the Overall Investment

The viability of the project will, however, only be possible through the following conceptual and strategic approaches and actions outlined in the Structure Plan. Furthermore, it is of particular importance that the following key factors are considered:

• High quality international standard of all facilities and services must be achieved.
• Development of the holiday and resort area with very limited arrival of excursionists.
• A marketing and PR strategy to be implemented at the earliest date.
• The project area has been strongly positioned with a unique market profile to be maintained.
• Management of facilities and services as well as management of the project area are in place and of a high international standard.