An Argument for Retrofitting Existing Cities vs. Building Greenfield Cities

By Anonymous

As we look at best practices for investing in sustainable, competitive cities, most of the examples we have reviewed in class have either been driven by government or at least had significant government involvement. As I reviewed the prescriptive steps in planning that were proposed, it struck me that in order for these steps to result in the successful development of a sustainable, competitive city, it would require a high degree of intellectual honesty on the part of the protagonist, particularly as it relates to learning from history and past practice, measuring outcomes and learning and adapting. The question this brought me to is, if the protagonist is the government, is this a reasonable expectation? And if not, where does that leave us? Continue reading

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New York – Sustainable and Competitive Urbanization, Infrastructure, and Finance? in the News This Week

By John Macomber

These news items from Gotham City might add some further flavor to our discussion of PlaNYC in Thursday’s class, March 7:

(Learning Hub entry here)

(Related post in this blog about current events here)

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Glad to see that long view politicians and domain experts can mobilize funding to make investments based on science and with the benefit of the populace in mind! Continue reading

In the news: Urbanization, Resource Scarcity, Cities, and Political Stalemates

(Updated March 35)

By John Macomber

Once you start tying phenomena together, the topics of our course are in the news everywhere. As we head into the last days of the Q3 term, here are a smattering just from the last week or two. It would be plausible to spring from these into an original post that applies some analysis or frameworks or segmentation to add the “so what” utility. Continue reading

How complex should new economic cities be in order to meet their objective?

By Nour El Hoda Farrag

The stated objective of establishing King Abdullah Economic City (KAEC) in Saudi Arabia is to diversify the economy and reduce unemployment. Two of Saudi Arabia’s main challenges are the economy’s high dependency on oil and relatively large local population. However, the same challenges can be perceived as its two main levers, and the reasons why such an initiative can be successful. As the second largest country in the Arab World, Saudi Arabia can rely on local consumption to drive GDP growth and use this platform to scale and export to neighboring countries. With the second largest proven oil reserves in the World, Saudi Arabia has the unique, invaluable advantage of deep pockets to sponsor mega infrastructure / economic projects that can enhance value across the economy, and is incentivized to do so. Moreover, acknowledging its natural resource wealth as a key strength, the government/City’s leadership has rightfully, in my view, focused on especially expanding industries that are either energy-intensive, or oil-based, to leverage its resource, alongside other non-oil related industries. To this end, as the case indicates, early adopters of the project were companies spanning the food, packaging, pharmaceutical, and oil industries.

The project’s main shortcomings, in my view, lie in its financial planning and execution. The case quotes the president of KAEC’s Industrial Valley and City Services, Ahmed Linjawy, as saying: “The original assumption was that… anything we do, we assume we will do it ourselves.” The “Labor Camp” is an example of a responsibility, which in my opinion should be left to the project’s industrial / corporate clients. Other examples in fact include the education, hospitality and residential arms of the project; all of which seem to be dictated through a master plan, as opposed to taken care of by market demand/supply forces. Continue reading

Slum lords as entrepreneurs

By Alice Heathcote

Annawadi sits beside the road to the Mumbai airport, on “a stretch where new India and old India collided and made new India late”

Behind the Beautiful Forevers, Katherine Boo

After much insistence my mother, I recently started reading ‘Behind the Beautiful Forevers’,a non-fiction work from Pulitzer prize-winning journalist Katherine Boo. The book follows the lives of the inhabitants of Annawadi, a slum settlement in the shadow of luxury hotels near the Mumbai airport. The main character, Abdul Hussain, is a Muslim teenager who turns an increasingly success profit through reselling the recyclable garbage that richer people throw away. He begins to dream of a life outside of Annawadi, and even a wife who ‘does not care that he smells’. His success catches up to him however, when his next-door neighbor attempts suicide and he is falsely accused of her murder.

At this point, the true tragedy begins to unfold. In the legal vacuum of Annawadi, the Indian police are anything but a force for good. Despite the fact there are hundreds of residents to prove his innocence, Abdul is charged. The police know his family has money stored away and they have an angle now for getting a slice. Police officers arrest the accused and demand bribes; when Abdul’s mother refuses to pay most bribes, family members are imprisoned and beaten. The story gives us an inside view of the Indian criminal justice system, in which success will attract resentment, unwanted attention from authorities and a higher price tag to buy yourself out of jail. Continue reading

Bogota’s Future

By Deepa Raghunathan

According to Antanas Mockus, former mayor of Bogota, “The worst thing for a Latin man is to find himself raising another man’s child,”[1] which explains the political culture that requires new plans under each mayor, president and politician. With the government and development banks able to provide funds to begin infrastructure improvements in growing cities, politics are the stumbling block to network expansion.

In contrast to its rival-city Medellin, the home of Colombia’s only metro line, Bogota is much more chaotic and crowded with a population of around eight million. The Transmilenio has max ridership at 45,000 users per hour, far below what is necessary for a growing city in a developing country. Medellin’s metro is used by approximately 500,000 users daily, compared to 1.7 million Transmilenio users in Bogota.[2] Though its metro is used far less, it has the potential to serve many more users with increased headways and longer trains. Due to its completely separated nature, it is faster regardless of road traffic.

As shown in the Transmilenio case, Bogota’s BRT line was unveiled as a great success, but it was only an initial step in what needs to be a grander transportation networking scheme that allows greater and more efficient integration of the growing city. For Bogota, BRT is a temporary solution.

As an intern at the Ministry of Environment and Sustainable Development, I was briefed on the five key areas the President saw as growth “locomotives,” including infrastructure.  I had numerous meetings with the Office of the Presidency, Ministry of Transportation and academics at the Universidad de los Andes discussing the current state of transportation infrastructure and how to move forward, and quickly realized that there were numerous plans but no political will to execute.

For my daily commute to work, down Avenida Septima, I initially walked thirty minutes to the government office. I soon realized the small buses were a much more convenient method of transportation – I did not need to walk extra blocks to Caracas to catch the Transmilenio, I was picked up and dropped off exactly where I needed to be, and if one was too full, I could simply wait five seconds for the next. Transportation alternatives should exist, but the needs of the growing city should not be held hostage by the temporary needs of a few.

Asking everyone I came across their thoughts on the BRT that I had moved to Colombia to learn about, I was sad that the overwhelming response was, “It’s bad because it’s too crowded.” Riding once during rush hour, I felt more packed than I had in any NYC subway, most likely because the standing room due to seating arrangements and the start-stop nature of traffic.

There is no question that the Transmilenio has served Bogota well, but unless a more extensive system is put into place it will fall prey to over-use and under-maintenance. With government support and foresight, a metro line will serve the city well and support the overcrowded existing infrastructure.

 


[1] Kimmelman, Michael. “Past Its Golden Moment, Bogotá Clings to Hope.” The New York Times. The New York Times, 08 July 2012. Web. 10 Feb. 2013

[2] Hutchinson, Alex. “TransMilenio: The Good, the Bus and the Ugly.” TheCityFix. N.p., n.d. Web. 10 Feb. 2013.

The Quest of Costa Rican Buses

By Jannis Koehn

Last spring, I visited Costa Rica for the first time after more than ten years. What I found most astounding was that the buses that took me through San José and across the country seemed to be the same old models I had seen back in 2000. Haven’t oil prices soared from $10-20 then to $90-110 today? Haven’t manufacturers developed modern fuel-efficient engines since? So why did operators not invest in more fuel-efficient buses? Costa Rica is proud of its 90% renewable power sector and successfully developed an image as a heaven for eco-tourism. Yet, the country’s public transport system lags these ambitions. Today, Costa Rica imports 15-20 million barrels of petroleum products annually, spending around $2-3 billion, and the air in San José is full of diesel soot. The paradox of old buses is a widespread phenomenon in the developing world – and, one could argue, even in some developed countries.

Koehn typical city bus  Koehn long distance bus

Pictures: Typical city bus (left) and relatively modern long-distance bus in Costa Rica

As an ordinary citizen, I cannot change government policy. But there may be scope for entrepreneurship, social or for-profit. On a lengthy bus trip to the country’s North, I started wondering what the economic rationale for bus operators was that prevented them from investing in new models, and I did some basic calculations. Factoring in basic variables such as annual mileage, fuel economy, diesel prices, bus prices and capital costs, I concluded that investing in more efficient buses would for many operators be economically favorable, at least for long distances. Given that most buses around were still old and inefficient, and unless diesel subsidies or import duties on buses distorted the market, operators may simply not have access to sufficient capital to buy new buses – that is where a startup, a bank or an international institution may help out.

For this article, I researched government policies and refined my assumptions, but the results did not change. Import duties on buses are negligible (<5%[1]), and I did not find evidence for diesel subsidies despite prices of USD 5.00 per gallon. So, long distances more than for city routes, and with used rather than new buses, replacing old buses seems to make sense. Here are the results for different capital costs in one graph.

Koehn savings estimate

The underlying back-of-the-envelope calculations look as follows:

Koehn savings calculation

So, what can businesses and entrepreneurs do to enable Costa Rican bus operators to make investments that are economically and socially beneficial? As a bus manufacturer, one could provide leasing arrangement to alleviate upfront capital constraints. Volvo or Daimler might also partner with the World Bank or other development institutions to create a fund that bridges capital needs. As an entrepreneur, one may set up a small investment fund, or tap crowd-funding as a source of capital, and lease out the buses. As a Harvard student, one may engage HU’s Shuttle Service and encourage a renewal of buses on campus, recycling the current ones cheaply to Costa Rica. That would also solve another problem: Noisy buses that inhibit quality of sleep here in Cambridge.

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