Smart City and PPP
The Past Analysis and relating the future of the Cities.
In 2007, for the first time in human history, more people lived in urban areas thanrural ones. Fast forward to today andgrowing urbanization patterns show fewsigns of abating. An estimated 3 millionpeople move to cities every week. By 2050,city dwellers are expected to outnumber their rural counterparts by a ratio of 2:1.
Saddled with legacy infrastructure andlimited budgets, many urban areas arestruggling to keep pace with such rapidgrowth.
The result is increased congestion, reduced quality of life, lost economicpotential, and negative health outcomes. Cities around the world are increasinglylooking to implement initiatives thatrespond to these challenges. But limitedfunds constrain progress. Just 16 % of cities are able to self-fund requiredinfrastructure projects. As a result, citiesare enlisting the support of private and non-profit partners to advance their smartcity agendas. EURO INDIA Consulting here examines the creativeways municipalities are using private andnon-profit sector participation to advance their smart city agendas and distil thelessons learned for other cash-strapped, cities seeking to overcome their own funding and financing barriers.
Partnering for smart city initiatives.
From initiatives aimed at improving public health and expanding Wi-Fi access topromoting affordable housing, municipalities are forging innovative partnershipsto improve the quality of life for their residents and as a means of refurbishingand modernizing aging infrastructure assets. Their experiences show how citiescan overcome traditional barriers to funding and financing smart city projectsby demonstrating new technology’s potential to reduce costs, recycling existingand legacy infrastructure assets, unlocking value, and bringing a critical mass ofplayers together to spur economic development.
The methodology used by EURO INDIA Consulting leveraging Public and Private Partnerships
Whatever kind of smart city initiative a local government pursues, several key practicescan set the stage for successful public private collaborations.
Here are a few ways Euro India fosters for productive partnerships:
- Start with the end in mind.
EURO INDIA Smart Consultingwith its participation helps in defining the desired outcomes at the outset of the project. Getting clarity around the ultimate objectives you’re trying to achieveand the needs you’re trying to address is anecessary first step.
- Inventory of available assets.
EURO INDIA Smart Consulting digs out the stock of the assets available at disposal. Are there particular assets thatcould be recycled? If yes then is it permitted to recycle the asset or there are barriersin transferring ownership or management of the asset? Once a public sector entity hasestablished clarity with the Euro India what it’s permitted to do, the next step is understandingthe relative value of the assets to both the city and to theprivate sector.
- Understand the business model.
What is the proposed revenue model? What are the related business risks? Projects need to be financially sustainable, which, in some cases, may require scale beyond the city council and the government involved.
- Appoint a champion with clear decision-making authority.
EURO INDIA Smart Consulting always targets to have a clear decision-maker, often a chief innovation officer or equivalent leader, within city government, who can streamline planning and aid in building keyrelationships. The city-led approach assists in project implementation by establishing apublic champion to act as a face for the city.
- Build local support.
When smart city projects have local support, cities are better positioned to attract privatepartners. Here in the scenario, Euro India again plays the pivotal role by involving itself with the government and local and the social leaders from different communities to clarify the benefits which can be reaped. And once the residents embrace projects that have clear social benefits and such projectsappeal to businesses’ social responsibility goals. The likelihood of receiving philanthropic support improves when the project serves the needs of a populationand aligns with a private partner’s mission.
- Develop a business case that clearly lays out the value to potential partners.
A city must present a business case that clearly articulates the potential value of theproject to private partners. The value can take different forms, from direct returns oninvestment to indirect benefits like greater economic development.While many businesses will not receive a direct return, the improvements to the city indicatefuture financial gains for the private sector.
- Create a third-party entity.
Establishing a third-party entity encourages role clarity, political feasibility, and eases procurement. A third-party entity can help partners and cities navigate the complexstructure of both city governments and private corporations. Third parties provide a clear platformfor decision-making and planning. That’s what EURO INDIA Smart Consulting is all about in the role.
How can the private and public sectors work together to create smart cities?
To start with here the Smart-city experts share examples of successful public–private partnerships from across the world, where the city of Copenhagen is a live example of success.
How does a city transform itself into a smart city?
One strategy involves bringing the private sector into the fold, to provide funding, technical know-how, and innovation that complements public-sector efforts. But bringing these two different elements together can also prove challenging in practice. At one of the public event in New York, some thought leaders asked smart-city experts for examples of successful public–private partnerships.
And the following Insights were received for example scenarios
A lot of people are exploring and trying different things and trying to be thoughtful about it. To give a couple of examples, in Copenhagen they’re working with Hitachi around how to monetize data sets to be used for creating applications and other solutions for residents.
Another example is how Abu Dhabi has partnered with a Swiss company around telemedicine, determininghow to provide solutions, do so equitably, and ensure that there’s a good flow of funds.
Another one is Mexico City, which is working with a non-profit around earthquake detection. It’s not just about for-profit companies; it’s also about think tanks and non-profits who are working in this space and thinking about bringing them into this ecosystem.
A different model here is what Singapore is doing with its smart-nation initiative. The country is trying to incubate a number of different solutions on the governmental side, with the hope of spinning them off, so that they do have some longer-term, more sustainable revenue stream against them.
Developing Economies smart cities solutions Scenarios.
As the solutions work to close the infrastructure gap, city governmentsin developing economies must strongly consider smart infrastructuresolutions, which use advanced technologies to deliver works and services to citizens. Because they help cities operate faster, more effectively, and more efficiently, smart infrastructure solutions help governments leapfrog common traditional infrastructure options and commonservice delivery constraints.
Thus, as project teams help craft infrastructure delivery businessmodels, and then prepare the related procurement structures, they should consider the technologicalimplications of the projectensuring the project will create value over the long term.
The examples (below) in Africa (region-wide), Argentina, and Kosovo present technological innovations used by the developing economies across regions to foster innovation in infrastructure provision and improve public service delivery.
- Africa (region-wide)
Mobile phone-based technological innovations in Africa have allowed countries in the region to surpassor leapfrog challenges in both communication and financial infrastructure. In communication, countriesin these developing economies (here and throughout the developing world) have not had to invest in landlinesdue to the expansion of mobile phone use. More specifically, Ethiopia, Libya, and South Sudan did not previously make substantial telecommunication cable installations, and thus would not need to upgrade from analogue to Asymmetric Digital Subscriber Line (ADSL)— they can immediately implement the latest 5G/LTE networks.
29 Mobile banking applications also reduced the need for common financial sector infrastructure as in developed nations, instead allowing users to transfer value through phones rather than relying on brick-andmortar banks or ATMs.
- Buenos Aires, Argentina
Buenos Aires provides one example of the benefits a government gains when it leverages smart citiessolutions. In 2010, the city implemented a new IT system that has improved its response to infrastructureproblems and helped to head off some problems before they even occur.Today, rather than phoning a call centre to ask the government to fix potholes, remove graffiti, or respond to other issues, citizens in Buenos Aires can use a mobile app or social media to make those requests.The citizen might, for instance, tweet a picture of a broken sidewalk along with a short description.Using integrated geographic information system (GIS) technology, the app sends the location of the problem to the relevant government agency and dispatches a vendor to make a repair. Then a city street inspectoruses a mobile device to confirm and document the completed work. Government agencies also use anelectronic dashboard to monitor the status of eachcomplaint and capture citizen feedback.
In addition, Buenos Aires uses data from sensors and crowdsourcing to pinpoint potential problems in specificlocations. For example, sensors that measure the speed, direction, and level of water in sewage drains can predictwhen flooding is likely to occur and generate alarms, allowing city workers to respond to the problem beforefloodwater has a chance to harm people or property. Thanks to these smart technologies, Buenos Aires hasseen the average time to resolve a complaint drop by 93 % without incurring additional costs, allowing the city to fix more problems in less time.
- Krusha e Madhe, Kosovo
The World Bank has used unmanned aerial vehicles(UAVs)—commonly known as drones—in Kosovo to conduct quick, low-cost land surveys, allowing residentsof one village to officially establish their property rights. Officials with the national government hope to apply similar technology in cities. In the village of Krusha e Madhe, where most men andboys were killed during the conflicts of the late 1990s, women have been working to improve their lives byestablishing business cooperatives. In the past, because most of the women did not have formal registration fortheir homes or lands, they could not use those assets as collateral when seeking credit. In 2015, World Bankemployees spent one week collecting data with a UAV, creating high-resolution maps to support the officialregistration of lands in the village. Kosovo’s cities have seen rapid expansion in recent years, including many informal settlements and illegalconstruction. To address this problem, the government of Kosovo has started a program that lets landownerslegalize their property rights. One specialist involved in the project in Krusha e Madhe has observed that thesame technology could support those efforts in cities, helping to produce maps and 3D models thatare accurate, current, and cost-effective.
References
Deloitte Argentina, Deloitte RC – Responsive City app, Deloitte & Co.S.A., https://itunes.apple.com/us/app/deloitte-rc-responsive-city/id943007411?mt=8
World Bank, “Drones offer innovative solution for localmapping,” January 7, 2016, http://www.worldbank.org/en/news/feature/2016/01/07/drones-offer-innovative-solutionfor-local-mapping