The Mayors’ Think Tank 2012 at MIPIM attracted a high-powered group of city leaders, including Mayors, Deputy Mayors, Council Leaders, and City CEOs from around 80 different cities, enabling city leaders to exchange insights and innovations in a private discussion. Get exclusive access to the conclusions made during this closed door event.

1. MIPIM Mayors’ Meeting Climbs Infrastructure
Mountain
Greg Clark, Moderator of the MIPIM Mayor’s Think Tank 2012.
The 4th Annual Mayors’ Think Tank at MIPIM was held Wednesday March 7th2012 at MIPIM in
Cannes, France.
1. City mayors with ambition
More than 60 Mayors, Deputy Mayors, and other City leaders attended the MIPIM Mayor’s Think
Tank from more than 30 countries. For the first time, the largest group of Mayors came from
Canada, with Russia and UK not far behind. From Sao Paulo and Moscow through to Manchester,
Barcelona, Lisbon, Montreal, Toronto, Copenhagen, Stuttgart, and Oslo, a large number of major
cities were present, and their voices were heard.
The Think Tank is a conversation between the City Leaders, focussed on table based discussions in
small groups of 10-20. It is a confidential meeting, with no media present, where Mayors and city
leaders can exchange insights and experiences, away from the cameras.
2. Cities and Infrastructure: the essential link
The themes of this year’s Think Tank was infrastructure. Six tables debated different dimensions of
the issue: including:
The social return on infrastructure investment,
The role of utilities,
How to finance infrastructure,
Making transport options available,
Combining ambitious projects with ageing infrastructure,
Working out who pays for new connectivity.
The first observation for the city leaders is that the Mayors regard Infrastructure as a special
dimension of city success. It is the key common ingredient between quality of life, sustainability, and
competitiveness. Infrastructure plays a unique role in how cities function. It integrates land use and
property with public services, commercial professional activities, and leisure and life style activities.
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2. Infrastructure is a spatial asset but it supports many different kinds of sectoral activities. For these
reasons, the cities take a special interest in infrastructure, even if very few cities have control of all
of the infrastructure systems directly.
3. Adjusting to the future is about infrastructure
For cities in Europe and North America that are competing with faster growing economies,
infrastructure deficits are the major drag on exploiting their advantages of quality of life, advanced
entrepreneurship, knowledge economy, and sustainability. Without infrastructure growth and
renewal, Europe and N America cannot play their new niche roles in a global economy in which they
are becoming less dominant, and must adjust to providing high value niches. Infrastructure deficits
in Europe and North America are preventing the full and effective adjustment to new economic,
environmental, and social imperatives.
4. Cities must lead infrastructure integration
Infrastructure is also a special ingredient because it requires something different from usual city
management to make it work. Much infrastructure is locally based, but is regulated or overseen by
national rules, laws, and systems, or by States, Provinces, and Regional Governments. Despite the
fact that cities and metropolitan areas are increasingly the units of competition and the hubs of
employment and social relations, as well as the core of eco-systems, there have not been systematic
reforms that give city governments more authority on infrastructure issues. There are essential local
imperatives but they addressed within national frameworks, and often the national frameworks are
ineffective or backward looking. So infrastructure is an issue on which Mayors have lots of interest
but also limited power. They have to make the case for what their cities need and find ways to be
become influential and play co-ordinating roles.
At the same time as being both local and national, infrastructure often straddles the public and
private sectors, where different countries have adopted distinctive patterns of privatisation and
contracting out. This further reduces the authority of city leaders and often leads to a co-ordination
failure between different infrastructure providers. These co-ordination failures involves big issues
such the failure to integrate transports systems with one ticket approaches and they also include
nuisances like different utilities digging up the same roads at different times!
These systemic co-ordination failures around infrastructure run directly against the need to foster
smart cities, which are based on the idea of intelligent management of a system of systems using a
single set of guiding principles and intelligent networks to achieve optimum integration. Fragmented
infrastructure leadership across public and private sectors in the enemy of progress and must be
tackled. System integration around cities and metropolitan areas is central to the task of combating
climate change, achieving greater investment, and organising around the needs of the mobile
citizen.
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3. 5. Investment in Infrastructure
The mayors also discussed the need to increase the investment rate as well as the co-ordination of
infrastructure within cities. There are many different means now available to finance infrastructure
and to re-finance existing infrastructure. The current challenges in public finance require that more
financial innovation is embraced but the National Finance Ministries and Treasuries are slow to
recognise the infrastructure investment requirements.
The financing suite for infrastructure includes at least:
Transfer payments from higher tiers of Government which is hard to secure.
Local taxation which is constrained in many countries, and is also now limited by weaker
local economies in many places.
Debt financing for local government and infrastructure companies.
Institutional and Sovereign Investment in infrastructure which is growing.
PPPs with tolls, user charges, taxes/levies.
‘Value capture’ tools such as Tax Increment Financing, Betterment Levies, and land value
shares.
Joint ventures including property/ capital partnerships between public and private sectors.
Project bonds, which can raise both equity investments and structure debt finance outside
of public debt, and are now on the increase in Europe.
The mayors commented that whilst there is some successful experience amongst the cities of using
each of these tools, Cities vary enormously on what is allowed or permitted within their own
constitutions. Essentially, very few cities are empowered to use many of these tools, as national
governments regulate their financial activities very closely in many countries.
6. The age of cities needs new financial empowerment
These differences produce competitive advantages for some and disadvantages for others. On the
whole, cities in Asia and North America have more self financing powers than those in Europe and
Latin America. Within Europe, cities in Germany, Switzerland, Austria, and Scandinavia have more
self financing powers than cities in UK, Ireland, Spain, France, and Italy. This latter group are more
dependent on their national and regional governments. Cities that have more self-financing powers
tend to have larger roles in infrastructure provision, and are thus better equipped to lead the
systems integration required to progress towards becoming smarter cities.
Cities that are growing or adapting their activities towards a new future want to use value capture
techniques more often because they need to meet demand with up-front investment, and pay for it
with the value created later. City leaders see each of these models as having some merits but the
Mayors stressed the need for more cities to have more choices about how they finance
infrastructure. Each approach will work well for some investments rather than others, so a range of
tools is needed.
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4. 7. Cities will lead innovation in infrastructure management and integration.
The overall conclusions from the 2012 MIPIM Mayors’ Think Tank were:
Cities are leading the innovation process of infrastructure. Continued local innovation by
cities in all aspects of local infrastructure are essential to drive reforms in markets, and to
win greater freedom for manouver. The Mayors Think Tank heard many examples of
innovation from the cities present in making progress with infrastructure and these are
recorded in the White Paper.
Active city leadership is required to demonstrate the ambition to use infrastructure to
manage and shape future growth in cities, to integrate systems of infrastructure and local
level and to secure good pubic outcomes for citizens and environment. City leaders have to
co-ordinate and integrate different systems if the citizen and environment is to benefit.
Flexibility in financing tools, regulatory frameworks, and land uses will be essential if
infrastructure is going to move from being a dormant to an active asset in many cities. the
biggest barrier is the lack of a ‘guiding mind’ that oversees infrastructure integration and
cities want to take this role, but are frequently hindered from doing so.
As well as expanding the range of financial tools used by cities, a long term, ‘whole of cycle’,
approach is needed if the right financial tools are to be adopted, and if ambition is going to
meet with resources and implementation capability. Infrastructure funding cycles need to be
50 years plus and the financial system and tools need to recognise that.
More than ever, infrastructure systems must be seen as a ‘joint venture’ between city and
metropolitan authorities and those who provide and finance infrastructures. Whilst
individual providers may remain responsible for their section of the infrastructure platform,
it is increasingly cities and metropolitan authorities who must provide the integration and
coordination required to foster innovation and to build smarter, more efficient, and resilient
cities.
In all of these tasks city leaders will play a lead role, making new proposals and seeking a new
agreement about the future of infrastructure in our cities. The governments that respond best will
win the advantages of our new era of smart and integrated cities.
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