When looking at infrastructure news or research, what’s the number one word seen? PPP. Not as in purchasing power parity or point-to-point protocol, but as in public private partnerships. Mexico’s infrastructure industry is all about these PPPs, and they are being used for everything. Roads, bridges, airports, energy, and just about any other infrastructure project possible. Mexico needs these infrastructures and many more to fulfill the needs of its immense population. Mexico is currently ranked #49 of 140 in infrastructure competitiveness, yet it is the 15th largest economy in the world. Goldman-Sachs predicts that by 2050, Mexico will become the 5th largest economy in the world, and at the same time will reach a peak population of more than 140 million people. The gap Mexico has to fill in the next years is tremendous, and there is no way the government can do it alone. Macroeconomic conditions, budget cuts, natural disasters, and many other factors are reducing the amount of money the government is assigning to the development of sustainable infrastructure. With the current budget cuts, it is estimated that the private sector will invest more than MX$200 billion for the development of these projects, and as time passes, the private sector will continue to inject larger quantities of money.
The Lungs of the City
Although PPPs are being used for important infrastructure projects, there is one type of PPP that has not been discussed as much: PPPs for public parks and green spaces. There are many few people in this world that will say a park is not something that brings a city to life. Chapultepec is Mexico City’s, and even Mexico’s most famous park, often referred to as the “Lungs of the City”. Chapultepec has been part of Mexico’s history, dating back to its Aztec roots and reminds the city of what it used to be.
“87 per cent of adults agreed that better-quality buildings and public spaces improve people’s quality of life.” – MORI 2004
Humans Before Profit
Recently, communities have gathered to protect their “lungs” from being destroyed by the development of infrastructure. Corredor Chapultepec was destined to transform Avenida Chapultepec into a luxury commercial space, filled with towering corporate buildings, and a dash of space for pedestrians. Citizens denied the construction of this development, stating that the project did not take into consideration sustainable urban planning. Some of the inhabitant’s concerns were that it would create a barrier between neighborhoods, creating dangerous and unlit areas at its borders. The public did not have access to the details of the PPP, raising red flags about what the money was really going to be invested in. The proposals taken for the project were limited to only a few, making it a secretive tendering process, and more than 12,000 m2 of the project would be given to commercial developments. Although the project did include an elevated park, it was not enough to convince the people to vote for its construction. According to World Bank, PPPs are “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance”. In order for the private sector to take part in the construction of infrastructure, and take on such large amounts of risk, off course companies will in exchange receive profit from what they are constructing. But in the case of infrastructure for many cities, what the people want is better urban planning, safer streets, and off course, green spaces.
Real World: Mexico City
Parks and green spaces “can be a symbol of a neighborhood’s vitality and character, or an emblem of its disorganization and poverty of spirit”. Mexico City has many beautiful neighborhoods, but there are also many that have been left in disregard. Mexico City’s most expensive and luxuries neighborhoods include Polanco, Condesa, Chapultepec, and Roma. These are city’s design, innovation, and economic hubs, which also happen to have the best well-kept and attractive green spaces in the entire city. Rents are extremely expensive, averaging at a price of around MX$16,000 to MX$23,000 a month. Taking a trip to the outskirts of the city to Iztapalapa, one can see the difference in green spaces, urban planning, and how rapid urbanization has taken its toll. Iztapalapa has a population of 1.8 million, which represents 20% of Mexico City’s total population. When comparing Iztapalapa and Miguel Hidalgo, which has the most luxurious neighborhoods, Iztapalapa has a density of 15,635.80 people per km2, while Miguel Hidalgo has a density of 7,523 people per km2. Miguel Hidalgo has a high quality of life, and the green areas encourage people to pay extremely high rents. When parks are not well maintained, they can often become “badges of shame” for communities.
The differences between parks in these two delegations are astonishing. Trees are left to die, dirt pathways, and graffiti everywhere. When parks are left unattended, they can attract illicit activities, and become the community’s trash dump, which as a result makes the community unsafe, and families become unhappy. The government cannot keep up with all of the demands for new infrastructure, and maintain parks, meaning there needs to be investment from other sources.
Build Trees, Not Malls
In 2016, Mexico will see the construction of 13 brand new commercial centers, with more than 362,490 m2 filled with shopping stores and offices. Architects and investors are making these spaces cities within cities, where people can fulfill many of their needs. The designs follow real estate’s latest trends, such as open spaces, and rooftop gardens, that look to replace the people’s need for green spaces. If Mexico wants to follow the real trend of creating a sustainable city of the future, it must optimize its urban planning and incorporate areas that will create communities.
Various cities have created community partnerships in which the private sector was given the responsibility of maintaining smaller parks and green areas, while the city focused on creating new areas, improving others, and maintaining the main parks. This created an equilibrium, so that no park was ignored, keeping all the areas clean and neighborhoods happy. Central Park is one of the most famous cases in which PPPs have changed the way green areas are seen. Elizabeth Barlow Rogers informed the community of how they could be involved in improving the park, and soon investments started pouring in from the private sector. The surrounding property values skyrocketed, becoming one of the most expensive places to live in the world. Many citizens complain that they do not see where their taxes go, but when they see a brand new park, or walk through beautiful green streets, the visible changes makes people want to continue investing. Central Park Conservancy raises money for the maintenance of the park, and creates jobs for locals, showing results in the number of visitors it gets per year. Chapultepec receives thousands of visitors each day due to how well kept it is, and has increased tourism significantly throughout the years. If only it were the same in many other delegations, where parks have been forgotten, and nobody dares to take a five minute stroll.
Developing parks through PPPs is extremely complicated due to the conflict of interests of both parties, but finding a middle ground where companies can make a good profit, will lead to the development to truly sustainable cities. These types of changes call for innovative business model that take into consideration the human and environmental aspects, along with the commercial aspects of investment. The creation of sustainable spaces will allow local economies to prosper, and enhance the quality of life in such massive cities. In order for Mexico to go from #31 to a leading spot on the list of the best countries to live in, PPPs must be used in more creative and innovative ways , that were never thought possible.
With information from Animal Politico, Project for Public Spaces, Google Maps, INEGI, and Public Parks, Private Partners