The contractor's view

Urban infrastructure from the contractor's view 

If you want to know how to develop urban infrastructure, you might want to ask the contractors who design, build and manage it. All around the world, privately held infrastructure contractors are taking an increasing role in delivering on the public sector's infrastructure demand.

FCC, a Spanish-based multinational infrastructure and municipal service provider, has been developing and maintaining urban infrastructure for more than a century, giving the company a unique perspective on the challenges facing cities. FCC Citizen Services operates in 54 countries, is building infrastructure on four continents and provides environmental services in 5,000 municipalities worldwide.

Responding to change

According to Baldomero Falcones, Chairman and CEO of FCC, cities are feeling pressure from multiple sides: "Most cities are facing a scarcity in economic resources as a result of the global financial crisis, a constant need to integrate new city residents seeking a better life in urban areas, and growing demand for more environmental policies and practices. This requires us to come up with innovative solutions for the infrastructure that we construct. We strive to do more with fewer resources by, for example, applying efficiency-related criteria to both the construction and design phases of infrastructure development with the ultimate goal of reducing construction and maintenance costs, or using innovative materials to reduce costs and carbon emissions.

These pressures have led Valderrivas Portland Cement, one of FCC's subsidiaries, to conduct research into using a raw material in concrete pavements that naturally captures CO2, thus reducing emissions. The pavement also provides a substitute to bitumen for road building and represents a basic and locally-available material for paving that can replace petroleum derivatives and therefore help reduce Spain's reliance on imports.

"We try to make infrastructure smarter and more efficient by applying new technologies that not only improve civic well-being, but also improve sustainability ratings, and facilitate dialog with consumers through the efficient management of the communications process," noted Mr. Falcones. "Cities are beginning to recognize that infrastructure is a great lever for advancing the sustainability agenda.

Establishing long-term priorities

According to FCC, one of the key requirements for sustainability is government's ability to establish their priorities for resource management by taking a long-term view of the impact that their decisions may have on the sustainability of the city or municipality. "Good urban planning must always trump political opportunism," acknowledged Mr. Falcones. "This should be based in three principles: first, acknowledge the transformation capacity of infrastructure and its contribution to sustainability; second, acknowledge that long-term thinking is inherent to sustainability policies, so when it comes to infrastructure, politicians must think in time frames that extend beyond their mandate; and third, promote PPPs as a way to develop efficient infrastructure financing and management.

One example of this type of long-term thinking can be seen in the Madrid Metro where successive regional governments have advocated for the expansion of the network. Since the early 1980s, the system has expanded from around 80 miles to encompass more than 300 miles of track today. The scale of change was truly massive: the MetroSur line (which FCC participated in developing) is thought to be one of the largest civil engineering projects that Europe has ever seen; the new Puerta del Sol metro station (another FCC project) dug the largest platform cavern ever to be excavated, measuring 207 meters in length, 20 meters in width and 15 meters in height.

Meeting the challenge

An area of particular interest to both public and private sector infrastructure players is the growing use of public-private-partnerships (PPPs) to deliver infrastructure in urban settings. On the funding side, many governments are actively engaged in developing regulatory and financial environments to help stimulate investment from the large infrastructure funds which, in turn, will inevitably require more involvement from the private infrastructure contractors.

"High-quality infrastructure is a transformative asset that should merit the interest of investors who believe in long-term investing and are willing to contribute to the development of new urban spaces," notes Mr. Falcones.

"But getting there will require businesses, governments and investment funds to be able to promote PPP collaboration and design balanced funding formulas that benefit everyone, particularly the citizens."

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