NRP 54 - B3 - Privatisation of financing and sustainability of urban infrastructures
Overview
Background & policy context:
Urban infrastructures such as football stadiums, shopping centres or airports are today considered as crucial elements for improving a city's sustainability. In fact, their creation is one of public authorities' major means of leverage with regard to offering the most effective, sustainable public services on the one hand, and to improving the overall functions of a city, conurbation or even a larger entity on the other.
In parallel to these concerns related to sustainability, we are today witnessing far-reaching changes in these urban structures' modalities for financing and production. In simple terms, urban infrastructures were traditionally somewhat mono-functional, whether private (for example shopping centres, hotel complexes, etc.) or public (football stadiums, administrative buildings, hospitals, etc.) within a financing approach whereby the owner was also the tenant. Today, however, we are seeing the emergence of far larger complexes that unite numerous functions and that frequently combine both public and private activities. Because of public authorities' financial difficulties or their decision to refrain from making investments, but also because of the renewal of interest in real estate following the stock market crises of 2001-2002, private institutional investors are becoming more and more involved. Major pension funds, insurance companies or more recently created institutions such as real estate funds, real estate companies quoted on the stock market or investment foundations are today among the major sponsors of large real estate projects in Switzerland. The intervention on the part of these investors reflects the growing influence of the actors and financial markets on the economy and on society that is known as financialisation.
From a territorial point of view, these infrastructures thus form part of the territorial entities that articulate far more diversified scales and places. We are therefore moving to a multi-actor logic. It must be analysed on the basis of the institutions that provide the framework for the collective action and that of the agreements and compromises negotiated - whether formally or informally - between actors. The latter come from various spheres and with financial and technical resources of various kinds. All of this leads to the creation of infrastructures that are naturally far more multi-functional than previously and that must also be considered as financial assets.
Objectives:
The objective of this research is to demonstrate how the intervention of new financial actors is modifying the production of sustainability in the case of urban infrastructures. In particular, it aims to develop a conceptual framework that makes possible to understand the relations between financialisation, sustainability and territory - and despite the fact that these relations are, a priori, contradictory.
On the one hand, in fact, sustainable development places emphasis on the necessity of participation and of taking the multiple issues at stake into account over time, according to a logic of "voice" (Hirschman, 1986). On the other hand, financialisation consists of dissociating the role of the entrepreneur from that of the financier in order to permit this latter to choose, at any moment, to withdraw his capital and invest it elsewhere, based on the exclusive criteria of yield and risk within the logic of "exit". Financialisation and sustainability are thus based, a priori, on radically opposed concepts of development.
Methodology:
This research is based on the study of the design and construction of major multi-purpose complexes in different Swiss cities, and on a study of the national and international strategy by the main actors in this sector.
Between six and eight case studies will be analysed, covering stadia, shopping centres, etc. – including both those already completed and others still in the project phase – in order to gain a better understanding, from the standpoint of sustainability, of the differing approaches of
public investors, traditional private investors or publicly quoted private sector investors. A particular attempt will be made to understand how and in what conditions the sustainability
of infrastructure can be either compromised or enhanced. The analysis will look at the methods used to finance the various components of projects, as well as the solutions found to sensitive issues in terms of sustainability (for example the conditions for the parking of motor vehicles).
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