Thursday, April 29, 2010

The Tianjin Eco-city and prospects for satellite townships

The Times reports of a collaborative effort by China and Singapore to jointly develop the greenfield Tianjin Eco-city, as a socially harmonious, environmentally friendly and resource-conserving, city in China. The Eco-city, located 40 km from the Tianjin city centre and 150 km from Beijing, is to be developed on 30 sq km of non-arable, salt-pan land at an estimated cost of $22 bn and be home to about 350,000 people.

Started in 2008 and expected to be completed in 10-15 years, the success or otherwise of Tianjin Eco-city could provide valuable lessons about the replicability and scalability of such experiments across the world. In view of the importance of cities as the economic growth engines of economies, the Eco-city will invariably be the reference point for similar projects to develop satellite townships across many countries, including India.

The City will have extensive green spaces and public recreational facilities; draw a significant part of its water supply from non-traditional sources such as desalinated water; have integrated waste management practices with emphasis on the reduction, reuse and recycling of waste; have good environment friendly public transport; have subsidized public housing to accommodate the lower and lower-middle income strata of society; and will be barrier-free to cater to the needs of the elderly and the mobility-impaired.

The City is being developed by the Sino-Singapore Tianjin Eco-City Investment and Development, a 50-50 joint venture company between a Singapore consortium led by the Keppel Group and a Chinese consortium led by Tianjin TEDA Investment Holdings, a state-owned enterprise based in Tianjin.

Without getting into the issue of the problems (which are numerous) associated with such projects or other judgments about them, here are a few observations on them

1. Such greenfield projects involve massive investments, and most often they will bleed the promoters for many years. In the circumstances, it is but inevitable that there be considerable government investments for such projects to take-off, especially on infrastructure. In fact, up-front government investments will have to become the pivot around which the private investments will slowly co-alesce.

2. It may be easier to develop the city around some specific anchor economic activities, especially knowledge-based sectors like say IT, biotechnology, or finance. These activities, which benefit from network effects, will also promote agglomeration economies and residential congregation in the areas surrounding the work-place. Such cities are likely to be post-modern cities.

3. In so far as anchor activities have the potential to catalyse the development of cities, the city can more easily develop around an already established commercial/industrial area.

4. All such cities should have excellent connectivity, both transport (air and land) and communications. Investments required to develop such infrastructure will inevitably have to come from governments.

5. Till the city attains a critical mass of economic activity, it may be necessary to offer generous subsidies, often verging on handouts (land at concessional rates, tax concessions, preferential treatment for utility service supply and its tariffs etc). Therefore the initial investors are likely to be beneficiaries of the "first-mover-advantage".

6. The infrastructure required for the development of such cities will have to go beyond roads, water, sewerage and public transport to include hospitals, schools, recreation facilities, various service providers, housing stock catering to people with different economic backgrounds etc. Attracting these services too will require generous support from the government.

7. Given the post-modern nature of such cities, an important contributor to their success in attracting the required mass of investments and economic activity will lie in the effectiveness of marketing and branding. Such cities will have to appeal to the lifestyle senses of potential migrants, both businesses and individuals.

8. All these will require a broad enabling policy framework, whose benign presence will facilitate the aforementioned activities. Agencies like the general purpose Singapore Cooperation Enterprise or the more sector-specific Singapore Urban Redevelopment Authority International can play an important role in the development of the Master Plans and the broad policy regimes.

In the final analysis, such greenfield cities can develop only if they offer greater attractions for businesses (up and downstream linkages, lower cost of operations, superior quality of infrastructure etc) and employees (better standard of living, advantage of network effects, closeness to work-place etc) than those offered by the neighbouring existing city.

Update 1 (25/8/2010)

Egyptian government is promoting two megacities - 6 October City, due west of Cairo, and New Cairo, due east - 20 miles away from the Cairo in an ambitious effort to decongest Cairo and meet the expanding needs. By 2020, planners expect the new satellite cities to house at least a quarter of Cairo’s 20 million residents and many of the government agencies that now have headquarters in the city.

The Times writes, "Only a country with a seemingly endless supply of open desert land — and an authoritarian government free to ignore public opinion — could contemplate such a gargantuan undertaking. The government already has moved a few thousand of the city’s poorest residents against their will from illegal slums in central Cairo to housing projects on the periphery."

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