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Solution for Smart Urban Planning for Megacities

The Challenge

Projections say that by 2050, the world will have undergone the largest and fastest period of urban expansion in human history. The urban population is estimated to double, while at the same time, the ...

Projections say that by 2050, the world will have undergone the largest and fastest period of urban expansion in human history. The urban population is estimated to double, while at the same time, the total urban area is projected to triple. City dwellers in emerging and developing countries, and their resource-intensive lifestyles, are increasingly going to create challenges in supporting many aspects of daily life. More urban dwellers require more resources such as water, land, food, and energy. These increases in demand put pressure on natural ecosystems in supporting cities. In addition, climate change, rising sea levels, or extreme weather events pose additional threats to cities. Infrastructure failure, such as electricity grid disruptions, flooding, diseases, and large-scale pollution, are some of the potential consequences.

Transforming rapid urban growth through public private partnership: A case study of Vietnam

The model of Phu My Hung New City Center in the southern area of Ho Chi Minh City, Vietnam, is a real life solution that demonstrates how a public private partnership may assist the modernization and expansion of a growing city.

26 years ago when our company, Central Trading & Development Group, first went to Vietnam from Taiwan, we faced challenging economic conditions that included a 370% inflation rate and a double digit unemployment rate. A set of three infrastructure projects were devised to transplant the Taiwanese economic growth experience to Ho Chi Minh City. But most importantly, we followed our founder’s ethos: “It is not important what we take away, but it is important what we leave behind.”

Job creation was the initial focus to serve as a catalyst for growth. In 1991 we introduced to Vietnam its first export oriented light industrial free-trade zone and attracted 150 manufacturing companies which generated 65,000 jobs. Over time the knowledge and skill content of workers have increased significantly. Total export value from Tan Thuan reached US$2.1 billion in 2013. Net export value reached half a billion US dollar, significantly bolstering the foreign exchange reserve of State Bank of Vietnam. However, as industrialization progressed, Vietnam soon faced electricity shortages in the mid to late 1990s with 500 power outages a month in Ho Chi Minh City. To address this issue, we invested in the Hiep Phuoc Power Company, the first 100% foreign owned power company in Vietnam. Our plant came on line in 1997/1998, just in time to help stabilize the electricity grid. Stable supply of electricity enabled the economy to continue to industrialize and to generate more job opportunities.

The most important project of the trio infrastructure ensemble was a southward urban expansion plan for Ho Chi Minh City. In this joint venture with the city government, we chose schools as the initial thrust to develop this new city center. The very first projects in Phu My Hung development were two schools: Saigon South People Founded School for Vietnamese nationals and Saigon South International School for children of foreign expatriates. Soon, the governments of Japan, South Korea and Taiwan set up their own consulate schools within Phu My Hung. Subsequently an education hub was formed with the opening of Royal Melbourne Institute of Technology of Australia, Ton Duc Thang University of Vietnam, Singapore International School, Renaissance International School, Canadian International School, and Lawrence S. Ting School. This educational cluster became the growth engine for other development. From a piece of swamp land with no road access, water, nor electricity, the Phu My Hung development grew as residential neighborhoods, hospitals, a shopping mall, a trade and exhibition center, and office towers were developed. Following the master plan, each new development addresses a new need within the urban fabric and reinforces previous developments. Today 50,000 people from 40 countries live in our city center area, where approximately 10,000 service sector jobs have been generated.

In the past 26 years, with job creation, education and infrastructure investments, we have, with the assistance and guidance of the government of Vietnam, build a new urban center as part of Ho Chi Minh City. We have increased the knowledge content of products produced in the area, increased the skill set of workers in manufacturing and service sectors, fostered the growth of leading education institutions, and helped hard working Vietnamese nationals to create a better future for themselves.

Phu My Hung is unique as there are very few projects like it in the world. It takes a holistic approach: long-term planning with the well-being of the host country and its citizens in mind, a strong execution focus to overcome the many challenges that one would naturally encounter with a project of such a long duration, and patient capital that seeks to optimize return not just for capital deployed but for the social-economic well-being of its urban residents. With the support of the government of Vietnam, the city center has transformed from a collection of inorganic buildings to a self-guiding sustainable organic community that will continue to grow and prosper. As the world looks forward to the development of 500 new cities in the coming two decades, the case of Phu My Hung—“where thoughtful, long-term-oriented, private-sector actors help the world to create efficient water, power, and transit solutions—can and must be replicated.”1

Albert K. Ting, Chairman, CX Technology Corporation, Taiwan

 


1 John Macomber, Harvard Business Review, July–August 2013 edition.

 

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