The term “dead capital” is used by economist Hernando de Soto Polar in his renowned book The Mystery of Capital, published in 2000. Dead capital refers to to informal property, which is underutilised and can’t be exchanged for financial capital. There are many forms of dead public capital, but our primary focus is on public hall. We take the case study of three main halls in Islamabad: Jinnah Convention Centre, Sir Syed Memorial Hall and Pakistan National Council of Arts (PNCA).
The government of Pakistan and others not only invested huge amounts of capital but also paid the cost of maintenance and renovation but these sites are not commercially active. Instead, these Public halls are underutilised.
The capacity of the Jinnah Convention Centre is 2,100, but it is costly because it hosts only 25 events per annum. PNCA hosts 300 events yearly and is limited to cultural and musical events. It can be increased if the restriction is removed. Second, it operates two shifts (morning and evening) in a day. Sir Syed Hall, for its part, is a well designed site and has good capacity, but no one knows about it.
All these halls are located in prime locations of the federal capital. They ought to be commercially available for the public, and they need proper marketing to that end. There should be a reasonable cost for booking; this will lead to increased numbers of events, so that they can generate better revenue. We consider some possibilities here.
Jinnah Convention Centre
Let us consider a proposed Scenario A for the Jinnah Convention Centre. If the government reduced the cost of an event to PKR 250,000 instead of 400,000, ticket charges would be PKR 1,000 per head. Let us suppose that the utilised expected capacity is 1,800 per event and the average expected events per year are 100. According to the calculation, it will generate PKR 43,000,000 in revenues per year. Now we consider a Scenario B, where we propose that if the per day charges reduce to PKR 200,000 and that events per year increased to 125. In this case, the per annum revenue will be PKR 87,500,000. In a third Scenario C, we might propose that if the event cost is reduced further to PKR 170,000. We suppose here that the adjustment of charges would increase the average per year event/booking of the hall to 150 events from its current level at about 20-25, and the total expected revenue would be PKR 183,000,000 per year.
Sir Syed Memorial Hall
The Sir Syed Memorial Hall is located in a prime location of Islamabad, and is particularly underutilised. It hosts two programmes per year! The cost of booking per day is almost reasonable, but it is not attracting event organisers due to a lack of maintenance and marketing.
In Islamabad, there are various schools, private organisations, etc., that can’t afford such amounts, so we propose some scenarios to attract other organizasions. Currently, the average per year revenue of Sir Syed Memorial Hall is only PKR 200,000. According to Scenario A, if the government does proper marketing and reduces the booking cost to PKR 80,000 per day, the expected number of bookings can be increased to 100 per year, generating revenue of PKR 8,000,000. Scenario B provides that if the per day booking cost is reduced to PKR 60,000 and it is expected to host 130 bookings per year, that can generate revenue of PKR 9,000,000.
Pakistan National Council of Arts (PNCA)
PNCA is located in the centre of Islamabad. It is certainly hosting more events than the above two, but it can still attract more activity and generate more revenue. The issue is that PNCA is limited to only cultural-themed and musical events. If the restriction were removed, it can attract small organisations, especially student societies. We propose the following scenarios. Currently, the PNCA generates a revenue of about PKR 27,500,000. If the restrictions are removed and the venue were open for all types of events, while reducing the booking per day cost to PKR 80,000 from PKR 100,000, we can expect it to host 450 events per day (it operates on two shifts a day) and generate about PKR 36,000,000.
The possibilities we consider above rely on a very simple concept.
In economics, the ‘Law of Demand’ is a fundamental one, and it posits an inverse relationship between price and demand. There are a lot of small organisations, schools, institutes, NGOs, etc. in the federal capital – and they cannot pay high costs for their events. If these costs were to be reduced, the law of demand may be expected to kick in.
Suppose the government does proper marketing of public halls or any other venue with a government entity, makes sure of the site’s availability to the public and reduces the costs as suggested above. What we see as ‘dead capital’ would no longer be so grossly underutilised.