PPPs to generate innovative solutions for urban development

Different reasons justify the existence of Public Private Partnerships (PPPs) and the raise of new business models where public and private agents take a stake: (i) need to stress the importance of results-oriented policy-making, since these kind of actions are very much linked to specific outcomes (which are usually linked to the generation of social value) –the sole process of defining the expected results derived from the PPP activity provokes greater specifications of the objective, therefore promoting the use of specific objective-activity indicators and offering a greater capacity to control the product/ service quality and how it is offered/ produced; (ii) value for money, meaning it leads to the maximization of the ROI, its efficiency and productivity. The concept of opportunity cost (“what I am to give up for allocating resources in this specific project instead of another”) is very much taken into account, and this, in turn, is directly linked to greater transparency and accountability efforts; (iii) greater financial needs from the public sector linked to the raise of the welfare state and public budget constraints; and (iv) risk share and transfer from the public to the private sector –and therefore benefit share.

In developing its Smart City Program and promoting its urban regeneration, the Barcelona City Council has complemented its vision and capability for delivering social value along the private sector by building and strengthening new forms of public-private relationships to further generate economic opportunities, create jobs and welfare, attract further investments in the city and provide innovative solutions for a better city management and the deployment of solutions, services and infrastructures to improve the citizen’s quality of life and the efficiency of the council in delivering its role as city manager.

 A great example of these new PPP forms is the recently integration of the management and exploitation of the existing municipal ICT infrastructure networks (fiber optic and wi-fi) in a single contract in Barcelona. This guarantees the upgrade and technological evolution of the network, since the tenderer assumes the requested investment for its service, while the repayment of the initial investment is done by means of exploiting the surplus network capacity for private uses. This has induced a new business model that generates savings and offers a more efficient and innovative public service, cost optimization through network integration and raise of economies of scale, more flexibility and capacity for developing future services and a greater control of the quality of the service from the council.