Reforming traditional PPP models to cope with the challenges of smart cities

Abstract

Growing urbanization trends, together with a greater environmental awareness, are transforming cities into game changers in the sustainability game. Cities are under pressure in both developed as well as developing economies. In developed countries, the challenge is to be able to tackle a lack of infrastructure, such as clean water and sanitation and mass transit transport systems. In developed countries, the challenges are distinct, but not less. There are growing needs for a renewal of infrastructures, such as water, transportation and energy systems, which deteriorate over time, and the related increasing challenges regarding the sustainability of the systems. Drivers of change include lower costs, greater levels of efficiency, better response to natural disasters (resilience), an ability to provide a good service, among others. Cities, regulators and operators are focused on improving innovation and develop truly smart cities and smart infrastructure. Public–private partnerships (PPPs) have been at the forefront of infrastructure development and management, however, questions exist regarding existing models which are usable for smart infrastructure. Our thesis is that existing models of PPP need to be significantly restructured, to be able to provide an adequate response to the smart infrastructure challenges and to be a driving force to make cities smarter. Greater flexibility is necessary, as is a profound change of the existing regulatory and procurement models, in order to ensure that the private sector will continue to have a pivotal role with regards to infrastructure, financing and management.