Sponge Cities

by | Oct 17, 2017 | Economics

Funding Public Private Partnerships (PPP’s) share the same challenges, whether it’s China or here in North America. Small projects need to be aggregated to reach the scale required for PPP’s. Large projects struggle to convey that the benefits of outweigh their hefty price tags.

China’s Sponge City Plan (SCP) is estimated to cost $1.5 Trillion (USD) for 657 cities. “China’s SCP represents an enormous and unprecedented undertaking by the government for achieving urban sustainability”1 The SCP “calls for the use of natural processes such as soil and vegetation as part of the urban runoff control strategy, which is similar to that of low impact development (LID) and green infrastructure (GI) practices being promoted in many parts of the world.”2

LID on a Massive Scale

The scale of the program is massive:

During 2015 and 2016, the China Ministry of Finance … selected 30 cities (Fig. 1), among more than five hundred applicants, as pilot sites under the SCP. Each city is to receive 400 to 600 million Yuan (RMB) (60 to 90 million US$) annually from the central government for three years, with the total investment estimated to be about 42.3 billion Yuan (RMB) or 6.35 billion US$. Local matching is required and public-private partnerships (PPP) are encouraged. Cities will receive a 10% bonus from the central government if the PPP contribution exceeds a certain percentage of the overall budget. According to preliminary estimates, the total investment on the SCP is roughly 100 to 150 million Yuan (RMB) ($15 to $22.5 million) average per square kilometer or 10 trillion Yuan (RMB) ($1.5 Trillion) for the 657 cities nationwide.”3

The goals are equally as impressive: “China’s sponge city initiative has an ambitious goal: by 2020, 80% of urban areas should absorb and re-use at least 70% of rainwater.”4

Funding Problems on a Massive Scale

The PPP framework has meant that cities are looking for private capital to pay for these projects. Of the more than $12 billion that been spent to date, the “central government funds roughly 15-20% of costs, with the remainder split between local governments and the private sector. … Investment in sponge city initiatives is … proving to be an increasingly difficult sell, with only tepid interest from domestic private investors.”5

In the era of budgetary constraints and competing needs, how to finance all the Sponge City projects is a real challenge. … A major current issue is how to develop a reliable, and tangible, estimate of returns on investments in the Sponge City projects. For example, how to quantify and appraise the benefit of Sponge City implementation is still an important question.6 (emphasis added)

Autocase for Sites

In Canada the Canadian Impact Infrastructure Exchange (CIIX)7 is addressing the problem of scale by standardizing the Triple Bottom Line Costs Benefit Analysis (TBL-CBA) done to evaluate the projects. And, Autocase for Sites quantifies and appraises the benefit of LID/GI projects and sponge cities in Canada and the U.S. using TBL-CBA.8

1 Jia, H., Wang, Z., Zhen, X., Clar, M., & Shaw, L. Y. (2017). China’s Sponge City construction: A discussion on technical approaches. Frontiers of Environmental Science & Engineering, 11(4), 18 – https://www.researchgate.net/publication/318993562_China%27s_sponge_city_construction_A_discussion_on_technical_approaches

2 Ibid.

3 Ibid.

4 “China’s ‘sponge cities’ aim to re-use 70% of rainwater” by Asit K Biswas, Kris Hartley. CNN – http://www.cnn.com/2017/09/17/asia/china-sponge-cities/index.html

5 Ibid.

6 Haifeng Jia et al. Op. Cit.

7 “The Canadian Impact Infrastructure Exchange (CIIX) launched its pilot program with City of Vancouver, City of Toronto and City of Charlottetown that will analyze three real world infrastructure projects.” https://carleton.ca/3ci/projects-and-initiatives/sustainable-infrastructure-ciix/

8 “The Green First Plan A City-Wide Green Infrastructure Assessment Prepared for Pittsburgh Water and Sewer Authority” http://apps.pittsburghpa.gov/pwsa/PWSA_City_Wide_Report_11-10-16_DRAFT.pdf

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