public–private partnership: a delusion for urban regeneration? evidence from italy

Public–Private Partnership: A Delusionfor Urban Regeneration? Evidence fromItaly

GUIDO CODECASA & DAVIDE PONZINI

Department of Planning and Architecture, Politecnico di Milano, Milano, Italy

(Received February 2009; accepted February 2010)

ABSTRACT Public–private partnership (PPP) is currently sought by scholars and policy-makers asa tool for overcoming the financial crisis of the State and low performance in public administration.Also, it is deemed as an opportunity to bring added value to projects and their contents in order tomeet new, emerging social demands. Despite the growing attention paid to PPPs, internationalliterature has been questioning their actual effectiveness and viability. PPPs suffer indeed from alack of strategy-making and dynamism in public sector organizations: public action gearedtowards private business cooperation requires advanced accounting, management and steeringskills that cannot be easily developed. Such issues match with the latest developments in the fieldof urban regeneration and represent a major stake for local governments. On the basis ofempirical evidence from Italian urban regeneration projects, the paper highlights an actualparadox for urban policies. Even when favourable conditions for project management are met inthe public sector, PPPs seem either unable to deliver innovative solutions or secure an actual,long-term engagement of private and public resources.

1. Public Policies at the Crossroad of State and Market

The relationship between government activities and the market has been a major issue at

stake for philosophy, economics and policy studies. However, these long-standing

traditions have mainly been disputing the alternate roles and functions of these two see-

mingly opposite domains, ignoring a number of cases of overlapping and intersection

(Kettle, 1993; Link, 2006). Only recently, this viewpoint has undergone substantial

revision. In particular, a number of contributors stressed how public intervention is

framed “within” market societies (Lindblom, 1988; Williamson, 1996, 1999): in order

to achieve objectives of public interest, governments have to affect or even effectively

bring out market-like arrangements (Lindblom, 2001). To some extent, it has also been

Correspondence Address: Guido Codecasa, Department of Planning and Architecture, Politecnico di Milano, Via

Bonardi, 3, 20133, Milano, Italy. Email: [email protected]

European Planning Studies Vol. 19, No. 4, April 2011

ISSN 0965-4313 Print/ISSN 1469-5944 Online/11/040647–21 # 2011 Taylor & FrancisDOI: 10.1080/09654313.2011.548471

Downloaded By: [Codecasa, Guido] At: 17:05 1 April 2011

questioned whether an actual divide may exist between government and business organ-

izations at an operational level (Alexander, 2001) since, at times, private actors happen

to hold objectives which do not differ significantly from those of public administrations

(LaFrance & Lehman, 2005).

In this regard, the bulk of literature on policy and public administration studies has been

stressing how governmental programmes essentially operate within sets and nets of

public, private and non-profit organizations (Sharpf, 1978; Kickert et al., 1997; Klijn &

Koppenjan, 2005). In this context, public–private partnership (PPP) and privatization

are catchwords that best capture the current sprawl of governing arrangements devised

to achieve budget control and public expenditure reduction by means of a responsibility

transfer to non-governmental organizations, notably in the fields of transport investments

and service delivery (Savas, 1987, 2000, 2005; Yarrow & Iasinski, 1996; Anderson & Hill,

1996), to a large extent in North America and Europe (Salamon, 1989, 2002; Vallaincourt

Roseneau, 2000).

The functional role of this strand of arrangements still remains undetermined and only

occasionally addressed by urban studies and planning research. Authors in these fields

mostly line up with the dominant approach in policy studies and limit themselves to

acknowledging the rise of new contractual schemes and procedures in which local

governments, private business (notably real estate), landowners and representatives to

local communities get involved (Bailey et al., 1996; Hastings, 1996; Pierre, 1998). The

term PPP may be referred to all those public initiatives where private organizations are

engaged (or share commitment), to some extent, in the design, the production or the

operation of utilities, services and assets. This definition, however, all-encompassing,

hints to a variety of situations that somehow affect the process of city development,

but, to say the least, it is unable to portray their distinctive characteristics.

For this reason, this paper aims at addressing the uncertainties in both defining and

accounting PPPs as a field of meaningful experiences for the planning debate. With this

purpose, we will first try to bridge an already existing body of literature and adapt its con-

ceptual lenses to the field of urban development projects, seen as typical displays of the

interplay between local governments and private sector organizations. Secondly, we

will try and test some normative views on selected case studies in Italy—a context

where the PPP topic is subjected by local governments to diverse attempts of sense-

making and experimentations. Both a literature review and the survey will be utilized to

question some basic assumptions as well as the challenges the PPP label is sought to

entail for planners.

2. PPPs and City Development: Between Rhetoric and Uncertain Practice

PPPs are currently subjected to an intense political debate and often charged with alternate

meanings (Linder, 1999). A quick investigation on press conferences and online reports

may show, in fact, how often discussing the involvement of private sector in governmental

affairs turns into speculating (and inflating) a realm of possibilities still unexplored. This

trend certainly does not help determine the actual significance of PPPs for urban policies,

but at least, it offers a first clue: public–private cooperation “occurs” already in different

instances—that have not yet been mapped comprehensively.

In order to build up some basic understanding, it is, thus, a good start to try and show-

case the general phenomenon and its current highlights, rather than indulge in broad

648 G. Codecasa and D. Ponzini


conceptualizations. In this regard, Table 1 provides a sample and helps render a few

representative sets of situations where public–private cooperation is bound to the

process of city development: the context of operations can be a large real estate redevelop-

ment project (Bult-Spiering & Dewulf, 2006) as well as the formation of a strategic spatial

planning agenda, or the setting of an exploratory (and not necessarily binding) agreement

to develop joint projects in broadly defined perimeters. Each situation has its own

distinctive area of scope, its drives and the output public–private cooperation is supposed

to bring out. As Table 2 reports, PPPs are also promoted under the flag of different policy

agendas: housing, land improvement, transportation, environment, technological inno-

vation applied to service delivery—each featuring unique combinations of actors.

Tables 1 and 2 summarize early attempts at mapping the experiments of PPP. On the

one hand, they provide a way to interpret the occurrence of cooperation in urban plan-

ning-related fields and its most typical remits. On the other hand, such a variety can

result confusing as it challenges the PPP vocabulary that is usually displayed in policy

guidelines and public finance handbooks: at first glance one would wonder what PPPs

are exactly meant to deliver and question the actual existence of common traits or

purposes.

Table 1. A classification of experiments of PPP derived from an extensive survey on UK

experiments in the mid-1990s

Type Mobilization Area of coverage Range of partners Remit

Development Local Single site orsmall area, e.g.town centre

Private developer,local association,local authority

Joint development tomutual advantage

Developmenttrust

Local Neighbourhood Community basedwith localauthorities andotherrepresentatives

Community-basedregeneration

Jointagreement

Locally, butmay be inresponse tonational policy

Clearly definedarea forregenerationprojects

Public, private,sometimes non-profit

Preparation offormal/informalstrategy,implementation oftenthrough third parties

Promotional Local, e.g. bythe Chamber ofCommerce

District- or city-wide

Private sector ledor sponsored by adevelopmentagency

Place marketing,promotion ofeconomic growth andinvestment

Agency National, basedon legislativepowers

Urban or sub-regional

Public sectorsponsored withprivate sectorappointees

Terms of referencefrom sponsoringagency

Strategic Regionalcounty local

Sub-regionalmetropolitan

All sectors Determining broadstrategy for growthand development andaccessing EU funds

Source: Adapted from Bailey et al. (1996).

Public–Private Partnership 649


Leaving aside the many facets of public–private cooperation, it is possible to notice

two aspects of general interest which can be used as anchor points for furthering our

discussion. First, PPPs seem mainly to signal the “rise of new tools” for government

(Salamon, 2002; Ponzini, 2008), that is, the discovery of alternate ways for local govern-

ments to take advantage of a third party either in the setting of their strategic agendas or the

performance of particular tasks (Pierre, 1998). Secondly, the term PPP can be referred to

any initiative, entailing the “pooling” of complementary resources held by several organ-

izations, within a regulatory framework, setting shares of risks and responsibilities among

the tiers concerned (Klijn et al., 2006).

In both respects, a problem of strategic choice for local governments can be exposed

(Friend, 2006). Opening up to the private sector represents, in fact, an option for public

administrations, which has reportedly found its main drives only in two alternate, and see-

mingly juxtaposed, discourses (Teisman & Klijn, 2000). On the one hand, PPPs refer to

new sources for financing the delivery of public utilities and the chance of loosening

the grip on public budgets. Otherwise, PPPs—however expensive—are expected to gen-

erate innovative solutions to the emerging issues of contemporary society, solutions that

might be achieved in no other ordinary way.

Exactly by delivering on these two promises, partnership formation and operation have

become frequent chapters in the agendas of central, regional and local governments. But

Table 2. The state of PPP initiatives in Europe concerning urban policies

Field

Share in totalnumber of

projects Characteristics Involved actors

Urbandevelopment

Very high Mostly local projects in citycentres. In the 1980s mainlyin larger cities, later also inother medium-sized andsmaller cities

Core: local governments,private developers and/orfinancers, housing authoritiesand associations

Peripheral: civil society. Forstrategic and politicalpurposes, projects are alsosupported by the CentralGovernment grants

Transportation High Mostly large-scale projects Core: governmentorganizations (central,regional and local), transportagencies

Peripheral: environmentalgroups

EnvironmentalGreen Projects

Growing, buttending towardscontracting out

Arrangements forenvironmental protectionand revitalization

Governments, not-for-profitorganizations

Technology/knowledge

Growing, buttending towardsexpertisenetworks

Projects for technologicalinnovation and sharingknowledge

Private companies(contractors), knowledgeinstitutes, consultants andgovernments

Source: Adapted and integrated from Klijn and Teisman (2000).



aside from the broad recognition of the issue at the institutional level, the interest partner-

ships draw seems to depend more on the expectations for a too sophisticated concept for

policy-making, rather than on an accurate rationale. Although surveys of PPP projects

have been credited by the academic field (Plummer & Heymans, 2002) and at the insti-

tutional level (see for example: European Commission, 2003), the field of action

appears to be widely unaccounted for (Osborne, 2000). In part, this lack of information

finds practical explanations: research in this field deals with unique restraints to the

access to critical data, for involved actors do not readily make it public, and written

records do not cover the entire urban policy-making process (Sagalyn, 2007). However,

research in this direction has become highly demanded in the face of the consequences

of this lack of knowledge. Civil servants and elected officers often step into long nego-

tiations without considering the technical and financial aspects that are needed to set

out an agreement with business-oriented organizations (Stainback, 2000), eventually

being unable to counteract a private actor’s drive towards short-term benefits and its

disregard for long-term and side effects (Hula, 1988; Finger et al., 2005). It follows that

policy-makers’ current bias for public–private cooperation cannot be deemed in principle

a recipe suited for every situation: cooperation is indeed subjected to several risks. But

how should partnerships be crafted in order to avoid such risks? The answer to this

question still remains open and is contended by many.

3. Making Partnerships Work in Urban Regeneration: Building a Normative View

The very fact that PPPs actually occur as displays of a social and political exchange

(DiGaetano & Strom, 2003) and that there are no established means to assess their conven-

ience does constitute an issue of capital importance. This applies, in particular, to most

instances of urban regeneration, where the interplay between public and private organiz-

ations is not new and widely acknowledged by planners (Alexander, 1996). The function-

ing of public–private cooperation and the stakes it raises for urban regeneration represent

then a focus of high interest for planning studies, which still lack a consistent framework

for analysis. As we have seen, there is not much awareness of the conditions for the take

off and functioning of PPPs. The topic, however, has emerged as a primary problem in a

number of research agendas. Linking them to the issues of urban regeneration seems here

to be a necessary move, though a particularly demanding one: it requires, in fact, the

search for references that currently enjoy little or no recognition in planning studies,

but that may hold important clues nonetheless.

In particular, John Friend was the forerunner to the analysis of the inter-corporate (that

is, inter-organizational) dimension in the management of urban projects and its challenges

for local governments (Friend et al., 1974). Following his approach, a partnership process

in urban regeneration can be seen as a composite and yet changing pattern of transactions

closely bound to the strategies of a local government and the other parties involved.

Friend’s approach had been long overlooked, only to surface later in public administration

studies (Kickert et al., 1997). It is exactly in this research field that some advances can be

traced and reviewed. Despite competing approaches to the analysis of PPP projects have

been proposed over the last years (ranging from juridical analysis and deal structuring, to

finance regulation), the inter-organizational approach applied to decision-making has

given origin to a branch of European surveys that has gained widespread attention,

especially for providing a comparative outlook to PPPs, and matching interpretative



with assessment purposes (Pagonis & Thornley, 2000; Hodge & Greve, 2007; Sagalyn,

2007). Even if most of these contributions must be searched for mainly in public manage-

ment and administration reviews, their empirical evidence is mainly drawn from infra-

structure and large-scale urban projects, and thus features a high relevance for planning

research (Edelenblos & Teisman, 2008).

According to this first season of comparative studies in the European context, PPP

experiences can be tentatively classified into three main instances (Koppenjan, 2005).

In the first one, projects happen to start from a difficult phase of consultations and they

eventually end up in public investments without private participation. In the second, a

public actor envisions an ambitious project entailing the commitment of private resources,

however, once private parties are allowed in, negotiations reach an impasse until the pro-

ject’s scope and aims are sized down. In the third one, urban projects are defined incremen-

tally through careful contact management: private and public organizations draw nearer

and nearer to a common framework of operations with better chances to bring out novel

solutions for transport infrastructure and real estate development.

Of these three groups, however, the projects of the third type are by far the less frequent.

In the light of similar results, some scholars have assumed extreme and unfavourable pos-

itions with regard to PPP initiatives (Teisman & Klijn 2002; Wettenhall, 2003; Angerer &

Hammerschmid, 2005) by stressing their rare success and the hardships they endure to

achieve desired results. PPPs may indeed feature extremely long time spans and rising

costs (Nelson, 2001), or even give room to opportunistic behaviours (Coulson, 2005).

On the basis of these criticisms, these (and several other) authors have pointed out the need

to further investigate the requirements for a sound management of PPPs. The debate is still

underway and divided, but it is already possible to notice four emerging areas of focus:

1. The need for local governments to “frame projects” in longer-term perspectives and

agendas.

2. The need to secure a locus for the “function of collective steering” and goal setting,

especially inside public administrations, for financing, regulating and designing

projects (Berg et al., 1997). For instance, the formation of interface task units inside

public administrations, if provided with a political mandate, could bring reliability to

deal setting and contract operation (Noble & Jones, 2006).

3. The involvement of private sector organizations calls for new methods of “process

management”—a deliberate and disciplined effort at governing networks of organiz-

ations and updating their composition (Agranoff & McGuire, 2003; Klijn & Teisman,

2000, 2003; Klijn & Koppenjan, 2005). Success may, in fact, rely on a better awareness

and control of the phasing of contact formation and deal setting (Osborne & Murray,

2000; Stainback, 2000; Van Ham & Koppenjan, 2001; Koppenjan, 2005).

4. “Trust” relations can also be seen as a key to the endurance of joint efforts in project

design and operation. The will to cooperate may vary, in fact, on the mutual consider-

ation among organizations: central State, local governments and real estate investors

have manifested distinctive outlooks and inclinations towards cooperation (Klijn

et al., 2005), and a private business entrusts its public sector partners depending on

the actual transparency and continuity of the negotiation process (Stainback, 2000).

As a matter of fact, much emphasis is put on public organizations, seen as the main parties

responsible for the flaws and oversights of public–private cooperation. The fact that private



parties may have no adequate means or know-how to deal with complex projects or highly

specialized fields of negotiation (Sagalyn, 1997; Boxmeer & Beckhoven, 2005) is considered

instead a secondary issue, or marginally explored (McGreal et al., 2000; Nijkamp et al.,

2002). The inability of successfully setting negotiations finds its main explanation in the

multi-headed character of government organizations (Klijn & Koppenjan, 2000). Public

organizations alternate, in fact, multiple or even conflicting orientations in a short time

frame. Also, due to ever-changing political commitment, public managers are forced to

keep their agendas as broad as possible and forgo the setting of clear terms for action

(Perry & Rainey, 1988), so that it is hard to make understood what the public interest is.

It comes as no surprise then if most authors are used to linking the fortune of PPPs to a

major change in public administration and the overcoming of this main dysfunction.

Besides, it is up to the public sector to reveal new chances for cooperation at its own

discretion and gear up for the challenges these choices entail. According to these contri-

butions, PPPs essentially rely on the performance of newly shaped public responsibilities,

and when it comes to the actual recommendations, public strategy-making is viewed as the

only key to triggering or exploiting the presence of the private sector in the design and

operation of urban projects.

In a way, the different instances of PPPs can be regarded as products and displays of

administrative discretion. Assuming this viewpoint, questioning the conditions which

affect the functioning of PPPs invites a comparison of alternate, strategic approaches

devised to engage the private sector. In those administrative contexts, where no major

dysfunctions are registered, the way PPPs are shaped can be, in fact, observed essentially

as the result of the technical choices—seen as the defining “attributes” of PPP forms—

performed by public managers. So, which instances of PPP can be considered “fair”

and “effective” exercises of administrative discretion?

Italy does not represent a landmark in pioneering PPP practices, but one of its distinctive

features can make it particularly suitable for addressing such a question. Italian municipa-

lities hold, in fact, a long tradition in freely tailoring urban policies, their contents and their

procedures. Beyond the extreme fragmentation of policy discourses, a selection of Italian

cases can show how even in similar institutional contexts a narrowly set topic—like

private involvement in urban redevelopment projects—can receive many different treat-

ments. A comparison of public strategies aiming at private involvement, unbiased by insti-

tutional constraints and rooted in favourable administrative contexts would prove to be

extremely useful to test and reconsider the role of PPPs in urban regeneration and its sig-

nificance for planners. However, before moving on with case analysis, a brief introduction

to the Italian institutional background and its current debate is necessary.

4. Mapping the Italian Debate: Raising Concerns for Private Involvement

The growing concern towards PPP in Italy is essentially drawn from individual experi-

ments carried out by committed local governments. Especially over the last 15 years,

local governments in Italy have been testing distinctive approaches in the management

of urban regeneration by devising original combinations of old, new and self-made

policy tools, in order to address their own special needs (Palermo, 2006; Palermo &

Ponzini, 2010). Basically, this growing repertoire is made up of individual responses by

public managers and policy makers that have sought to address three unprecedented

trends (Ombuen et al., 2000; Urbani, 2000): the struggle with the central State which



has been reducing financial transfers and simultaneously entitling local governments with

further competencies; a general uneasiness of local politics with comprehensive and stat-

utory planning; the rise of new opportunities for real estate development in abandoned

industrial sites, public estates and blighted neighbourhoods.

A key role in this process of change has been played by Italian municipalities, which are

formally appointed with the bulk of responsibilities regarding urban planning and land-use

regulation. Faced with these recent challenges, larger municipalities have resolved to put a

new emphasis towards “urban regeneration” as an action model based on the assembly of

project portfolios (Dente et al., 1990; Curti, 1997) and the control over the allocation of

social value caused by planning decisions and real estate investments (MIT, 2002). In

practice, this orientation translated into a new set of specialization fields that municipali-

ties only recently have started to delve into. In this context, the management of public–

private relations has finally surged as a technical issue. Public–private negotiation, a

rather common practice in urban growth management, has indeed rarely been perceived

a key activity to improving the quality of projects, their social impact (Mazza, 1997) or

the balance sheet for the public sector (Urbani, 2007).

The gist of the growing concern for partnership formation is relatively simple: prices in

real estate development are used to disguise the spill over effects due to nearby public uti-

lities, services and transport infrastructures (Micelli, 2004a). Local governments should

mind then how the production of the so-called public city (an embodiment of community

assets, landmarks and symbols) can affect the value of the privately built “city” and its

marketable components (Micelli, 2004b; Curti, 2006). In exchange for favourable plan-

ning decisions, real estate investors should be then asked to contribute to the production

of the public city, so that urban projects may work as single inputs to the fulfilment of

broader public objectives.

Despite some divisions among the Italian scholars (Gallia, 2004; Palermo, 2005), the

rationale of public–private cooperation is usually bound to financial and legal aspects.

In particular, PPP has been highlighted in the frame of a limited set of statutory planning

tools, the so-called integrated programmes (Micelli, 2004a; Pasqui, 2005) which oversha-

dowed the Italian planning debate for over a decade. An integrated programme is a bundle

of financial plans, building permits, project briefings and accessory agreements, crafted by

municipalities and their planning departments. Under certain conditions, these pro-

grammes are submitted by municipalities and local stakeholders in order to receive

grants issued by State Ministries or regional governments. In most cases these programmes

have also become the main focus of a covenant with real estate investors, or other State

organizations—an expedient to split the costs for new public facilities and secure either

governmental or private resources for large development schemes (Avarello & Ricci,

2000). Interestingly, this pledge of government grants induced several municipalities to

test joint planning and project accounting procedures (Savoldi, 2004). However,

nothing yet has been said about the forms of public–private arrangements that emerged

in the process.

5. Experiments in Italy: Investigating Alternate Forms of PPP in Urban

Regeneration

Given the present state of art, a consistent selection of case studies is extremely hard to

perform. We are only able to pick a sample of PPP projects that exerted a pull on the



operators during the main conferences on the subject (Urban Promo, 2005, 2006, 2007).

These cases distance themselves from the most diffused routines of public–private nego-

tiation in Italy, where a private proposal for redevelopment is subjected to an assessment,

and eventually awarded by local governments with development rights in exchange for

minor revisions to the project layout. Instead, the cases that interest us constitute an

action model shift: the individual attempts by a few Italian municipalities (and their

most dynamic sectors) at rethinking the management of urban regeneration by testing

new formats of private sector involvement. Following below, the snapshots of five

ongoing processes (updated to 2008) showcase five action models, suggesting their funda-

mental differences.

1. City of Milan. The conversion of the railway depot areas in Milan has been the subject

of a long-lasting dispute between the Municipality of Milan (and its planning depart-

ment) and the asset manager company (RFI) of the National Railways Group (FS)

which alone represents one of the main landowners in Milan. The FS, a former

public entity, underwent a process of privatization, and it currently acts as an industrial

concern with branches in real estate investments and appraisal. In 2006, high-profile

contacts between municipality councilmen and CEOs of RFI and the FS group were

established. In the following months, technical meetings were undertaken in order to

define an ensemble of site perimeters and unlock key properties of the FS for redeve-

lopment purposes. A joint process of planning and design started, and produced a draft

action programme. The leadership of the City Council promoted the signing of a con-

tract framework as the first step in the formation of a package deal with RFI. The

package features, in particular, a master plan devised as a comprehensive framework

for separate development projects (each following tailor-made procedures) and an

agreed work schedule for both parties. In turn, RFI swapped its properties concerned

(about 2 million sqm) to a special-purpose vehicle called Sistemi Urbani, while the

Municipality of Milan managed to obtain financial support from the Lombardy

Region for transport-oriented investments in the selected sites.

2. City of Genoa. The Erzelli hill stands as a keystone in the regeneration strategy of the

Municipality of Genoa, especially for its potential role in the city’s economics and the

industrial take off of the western side (the Ponente). The Erzelli hill is now the target area

of a mixed real estate project, bound to the creation of a high-tech industrial district (the

Technology Village), attached university facilities, applied research institutes and

housing. The project’s responsibility has been progressively shifting from public to

private hands over a 5-year period (2000–2005). In the beginning, a task force of the

Municipality drew the first development hypotheses and set a preliminary land-use regu-

lation framework in conjunction with the Province of Genoa. Then a development

agency (owned by local governments, local banks and the Chamber of Commerce)

explored the viability of possible solutions and investors. Finally after a series of

exploratory meetings, a consortium of high-tech industry firms adopted the outline of

the project and the location as an outlet for their own growth strategies. A special-

purpose vehicle (Genova High Tech) was thus formed: along with the Municipality,

it promoted a development scheme in search of further industrial partners and proceeded

with the purchase of the Erzelli property. After the land purchase agreement (39 million

Euros), in 2006, Genova High Tech acted as a host to new real estate investors, and

moved on to the definition of the development rights with the planning unit of the



Municipality. The latter worked as a reliant with public research institutes (willing to

settle in Erzelli and buy part of the designed facilities) and upper tier local governments,

sharing responsibilities in land-use regulation for that particular site.

3. City of Trento. The closure of the Michelin plants marked a breakdown in the heavy

industry of the city in 1999. The former Michelin estates represent the largest dismissed

industrial site in Trento and the closest to the city historical centre. Given its unique size

and its many open options for redevelopment, the area was considered both a future

opportunity and a potential threat by local politics. The Mayor of Trento thus tried

to secure the development site to a trusted operator: the City Council issued some

broad guidelines for the area, and through the mobilization of banking institutes and

local consortia, the formation of a new private corporation was finally achieved (Inizia-

tive Urbane). Iniziative Urbane subsequently bought the area and started to work on a

project layout, meeting both the financial requests of its shareholders and the approval

by the Municipality (its strategic planning unit and a set of departments). This even-

tually led to a progressive definition of a mixed residential project with the location

of a new park, a museum and university facilities. However, the 7-year-long nego-

tiation challenged the solidness of the shareholders’ group: the delay in the beginning

of the work resulted in enduring budget losses and a number of shareholders dropping

the joint venture. The company eventually found a new carrier, the Castello SGM,

which was, in 2009, in the process of selecting a general contractor. Meanwhile, the

Municipality sought the financial support of the Trento Province in order to either

buy or maintain part of the facilities to be delivered by the developer.

4. City of Parma. The Municipality of Parma identified four key regeneration sites—each

centred upon the location of a public amenity or a public facility, and providing space

for mixed residential and commercial real estate projects. In order to provide active gui-

dance to each development process, in 2004, the Municipality of Parma proceeded with

the formation of special-purpose vehicles, namely, STUs (an acronym which stands for

urban regeneration corporation), under the direct control of its planning department and

resource department. The action model sought by the Municipality of Parma is

two-fold: on the one hand, STUs perform the core tasks of land assembly, project

investment and operation within a given action perimeter. On the other hand, the

Municipality provides back-up by updating land-use regulation and acts as a broker

for governmental aid. Above all, the redevelopment of the railway station area

represented the most complex project in Parma and required the combined effort of

two distinct STU corporations. The Pasubio STU (a joint venture among three

private landowners and the Municipality) promotes a development scheme for

private housing and a large park—revolving around the assembly of 16 lots and the

dispute for the transfer of the existing manufacturing activities. The Stazione STU

works instead as a host of public funds on behalf of the Municipality, as it carries on

a public investment (consisting in the landscaping of public spaces and the improve-

ment of the old station) on private land. In order to do so, the STU has taken the

needed land on lease, and defined a complex procurement scheme for the new

improvements—through the inclusion of staff from qualified private consultants. The

Stazione STU was also created to avoid budgetary constraints: municipalities are not

allowed to make investments on the basis of projected cash flows, and would be

asked instead to prove the availability of funds covering the entire operation, from

its start to its end.



5. City of Ravenna. The urban core of Ravenna is connected to the seaport through an arti-

ficial canal: the Darsena. Its surroundings are regarded as the cornerstone for the econ-

omic conversion of the whole city and the site for housing expansion. Since 1995, the

“City Darsena”, has represented the flagship in the long-term strategy of the Municipal-

ity of Ravenna, embodied in the City Master Plan (PRG), and the Municipality has

committed itself to the redevelopment of the area. The Darsena stands apart from

other initiatives in Ravenna for its unique blend of industrial conversion objectives,

residential expansion and public space landscaping. However, the Municipality did

not seek an “exception to the planning rules” for a given action perimeter. The planning

department of Ravenna, through preliminary talks with about 50 land owners, crafted a

consistent development framework (Program for Urban Regeneration, PRU) for the

Darsena, further defining the guidelines in the PRG. These agreements also served

as a consensual basis to test a mechanism of land-use rights transfer—sought as an

incentive to draw real estate developers from the periphery of the city to the Darsena

site (Micelli, 2004a). The Municipality of Ravenna has been targeting the City

Darsena with a series of joint planning procedures (entailing the participation of

private parties, further local authorities and upper tier governments) with the goal of

earning financial aid from central and regional governments. The Municipality was

awarded with enough governmental grants to sustain an ambitious programme of

public infrastructures and used it as leverage for private real estate investments

within the newly established regulatory framework.

These cases give an idea about the great deal of discretion that local governments use in

defining the staging, the rules and the scope of their engagement with the private sector.

Still, the information we gathered above may be arranged and organized more effectively:

in a way, the extreme features of these five cases can be better analysed with respect to

their “strategic framework” and their “relational framework” (for an extensive review,

see: Gualini & Majoor, 2007; Gualini, 2008). Reference to “framing” springs from the

hypothesis that urban development projects and their outcomes are affected by a wider

decision field with given sources of authority and embedded systems of interests. More

precisely, projects mirror an existing combination of perceptions, beliefs and strategies

“in use” (Schon & Rein, 1994). Also, the pattern of relations that is formed after a

project is affected by an already existing set of rules, decision structures and institutions

(Klijn & Koppenjan, 2005). The concept of frame is, thus, two-fold, as it upholds both a

symbolic-cognitive value and an organizational-procedural dimension. The first aspect

hints at the fact that policy-making, planning, policy design and project management

convey ideas, visions and purposes which ultimately affect the actors’ preferences and

behaviours. In other words, the concept indicates the fact that a project revolves around

a precarious balance of interests and preferences held up by public and private organiz-

ations. The review of such purposes, along with documents and official statements,

allows us to define what a project is (namely and implicitly) meant for: in this case, we

can speak of a strategic framework.

The second aspect of framing points to the fact that decision-making, design and project

management contribute to shaping policy arenas, the setting of responsibilities and forms

of interaction—among and within organizations. In this case, the concept of framing

indicates the fact that projects are developed into (and consist of) a field of relations; in

this sense, we can speak of relational framework.



As far as our study is concerned, the concepts of strategic framework and relational

framework can be used to better understand the unique backgrounds of a project and its

significance for local governments. The former hints about the stakes a project rises, its

drivers, its contents and its connection to the local government agenda: it describes

which policy problem the initiative is meant to deal with. The latter refers to the organiz-

ational arrangements and the composite set of agreements that ultimately scope the

responsibilities and the allegiances of the parties involved; ultimately, it refers to how a

project is meant to operate. In this regard, Table 3 showcases these dimensions and

allows us to see at a glance five alternate forms of PPP.

The sheer diversity which emerges from this first, tentative comparison raises one major

concern. If each action model can be regarded as the embodiment of an approach to public

strategy-making, one may question whether these PPP forms were equally able to induce

similar advantages to local governments. This links back to the closing question of the

third paragraph and the argument of much public administration literature. Accordingly,

private sector involvement is deemed as good since it is able to either bring about cost

reduction or enrich the content of projects. An appraisal of cases then should use these

two points as leading criteria; however, even if we do not look at their actual outcomes,

a closer inspection of the PPP forms in Table 3 allows us to make a few significant

points on this matter.

The first striking aspect refers to the contrasting drives of PPPs. Municipalities seem, in

fact, caught between two fires: the urge to make sure enough resources are secured for a

regeneration initiative, and the need to endeavour the design for a development scheme—

either consistent with a stated public agenda or bringing a favourable payoff to the local

community. The critical remarks stressed by the literature about the requirements for a

sound public management of PPPs can come in handy at this point and better display

this ambiguity. After a number of interviews with key decision-makers, it was possible,

in fact, to create a checklist (Table 4) showing the extent to which public management

sought to address these aspects. In these respects, Table 4 provides an intuitive, though

approximate, representation of how local governments have been prioritizing either

project contents or the formation of stable relational frameworks.

We can notice that several municipalities give priority to consolidating a strong rela-

tional framework, deferring the definition of project contents and goals to later steps of

negotiation (as in Milan, Genoa and Trento). In these cases, public managers regard the

chance of opening up a certain site to any development scheme as a valuable option by

itself. In other words, for these action models, it is not a matter of what an initiative is

more suitable for, but whether there are enough resources to start with and, to trigger a

development process, regardless of its results. So, in exchange for prior warranties

about the engagement of third parties’ resources, municipalities decide to temporarily

hold their claims on what the project should deliver to the community and grant a

certain key site a special status. PPP contents are thus shaped outside (or in the absence

of) any consistent strategic framework.

In our view, the lack of this very feature makes a PPP a fundamentally “unaccountable”

inter-organizational process, involving no liabilities for external costs—its objectives

being randomly defined by individual (or political) pressures. This represents a major

issue for urban projects: the risk of unaccountability, in fact, virtually invalidates both

the pledge of bringing either added value to projects or public cost reduction.



When the opposite happens (as in Parma), private parties are divested of any responsi-

bility in the design of creative solutions for the local community, which remains an exclu-

sive task for the Municipality. Rather, private parties are asked to provide the means for

the delivery of ordinary items requested by the public sector, and simply fill their slots in

Table 3. PPP forms at glance—strategic and relational frameworks in five Italian case studies

Case

Strategic framework (communitystakes, project contents

administrative and political goals)

Relational framework(organizational arrangements andinter-organizational agreements)

Milan, recovery of thedepot areas of theNational Railway Group

Resolution of a long-standingdispute between a major landlordand the local government forunlocking key urban areas

Package deal: two-tier negotiation.Workgroups are appointed alongthe way. The existing officesprovide the infrastructure for thenegotiation. Projects and new land-use rights are set out throughprogressive goal-setting, project-scoping and design

Genova: TechnologyVillage, Erzelli Hill

Finding a location for industriesand services in the emergingeconomic sectors of the city’seconomy (research institutes,districts for high tech)

“Progressive switch” of projectmanagement “away from thepublic”: (1) special planning unitof the municipality; (2)development agency owned byprivate and public sectors; (3)committed private fundraiser; (4)joint venture with real estateinvestors. Public facilitiesdelivered on requests to ready-made public buyers.

Trento—formerMichelin plants

Securing a large dismissedindustrial site to a consistentdevelopment scheme for the localcommunity. Asking the private fora high-profile proposal

Public steering for the formation ofa new private entity—a “trustedinvestor for local politics”.Negotiation between municipalityand the newly built private entity.Private to submit further facilitieson demand

Parma—station area, andPasubio

Finding alternate techniques forfinancing public assets: real estateprojects as compensation for thefinancing of an asset of publicconcern and public procurement

Combination of special-purposevehicles (STUs) born as eitherpublic–private joint ventures orpublic entities for land assemblyand financing purposes. Also, themunicipality supports the work ofthe STUs by providing planningpermissions and updating itsstatutory planning framework

Ravenna—City DarsenaProject

Implementing a long-term publicstrategy: financing the take-offand regeneration of an industrialarea

Project within a comprehensivepublic plan. Public–privateagreements for land-use rightstransfers and developmentinvestment programme definition.An influential planning task unit



the frame of wider procedures. Even cost reduction is not necessarily a goal here: Parma

shows, for instance, how an accountable process is essentially vowed to elude fixed terms

of public budgeting.

An analysis of PPP forms allows us to point out some structural limits affecting the

majority of strategic approaches to private inclusion and filter out those instances of

PPP that substantially hold no promises for the achievement of cost reduction and

content innovation. Of the five cases discussed, only the case of Ravenna seems to

stand up these criticisms. Are we in front of a comparatively suitable action model? In

order to answer this question, we are required to shift our level of analysis and focus on

the current progress of this initiative.

6. When Partnerships Do Not Even Take Off: Focus On The “City Darsena”

Project

The Municipality of Ravenna has been committed to only one action framework for the

regeneration of the “City Darsena” whose start was the preliminary meetings with 50

land owners and the project outline—the PRU passed in 1995 by the City Council.

Since its early conception, the “City Darsena” has featured an ambitious mix of private

and public housing, industrial site renovation and improvements in public land

(Figure 1) for an area of 136 ha, in a time frame of 30 years.

On the basis of overall cost estimates of 265 million Euros, the Municipality envisioned

a 68.5 million Euros public investment as leverage for private regeneration initiatives. In

order to gather this sum, an appointed taskforce of the municipality managed to collect

financial aid from the Central Government and the Emilia Romagna Regional Govern-

ment, with several successes: in 1998, the PRU programme was submitted to a call for pro-

posals by Ministry for Public Works, and granted 8.26 million Euros. An updated outline

of the same project was later rewarded by the Regional Government with additional finan-

cing, and similarly in 2000 by the Ministry of Public Works with another competitive grant

(PRUSST) for local development initiatives, and again with the so-called Porti e Stazioni

pilot programme. All these governmental grants were to be delivered on the condition that

the proposals were submitted after joint planning procedures. For this reason, the Munici-

pality scheduled diffuse consultations with the land owners in the area and signed a

number of bilateral agreements with them (in terms of statements of interest).

Table 4. Public strategies for private involvement—a checklist

PPPs prioritizing project contents PPPs prioritizing relational framework

Project contentsframed in a long-

range view?

A place for apublic steering

function?Presence of process

management?

Project developedover trust-based

relations?

Milano Only in early phasesp

Genova Only in earlyphases

p p

Trentop p

Only in early phasesParma

p p p

Ravennap p p p



Figure 1. Project outline (PRU) of the “City Darsena”—highlighted are the measures supported through public investmentsSource: Comune di Ravenna, adapted and translated by the authors.

Pu

blic

–P

rivate

Pa

rtnersh

ip6

61


Thanks to reiterated governmental aid, the Municipality successfully managed to

deliver all the assets envisioned in the project outline, respecting all schedules and dead-

lines. However, despite this progress, the Darsena Project has registered no significant

contribution from the private sector. The interventions involving the private property

owners and the agencies owning key assets (the National Railway Company and the

Port Authority) still linger in a preliminary design stage. As a matter of fact, private

sector organizations have limited their contribution to early consultation, stalling redeve-

lopment for a decade.

Only recently, real estate operators have revived their interest in the redevelopment of

the City Darsena as the main business opportunity in the region (Savorani, 2005). This

stimulated a significant changeover of property owners from manufacturing groups, essen-

tially unconcerned about the options open to regeneration to real estate developers. The

new comers who bought key properties in the Darsena area meant to give a new momen-

tum to the initiative by gathering in a consortium: the Consorzio Nuova Darsena (Urban

Promo, 2004). The consortium, however, did not live up to the hype; despite repeated

attempts at establishing a channel with the Municipality to negotiate a new layout for

the area, the consortium reportedly encountered the opposition of the City Council. As

a response, the Municipality created a public development agency along with the

Chamber of Commerce and the Ravenna Port Authority. Currently, the two new entities

contend the entitlement over the design of the operation, but both of them lack the consen-

sus and financial weight to guarantee the take off of the operation.

As a matter of fact, after 13 years since its conception, the City Darsena remains essen-

tially an all-public investment, assembled by a dynamic local government, without a func-

tioning arrangement with the private actors. This evidence comes in part as unexpected

and asks us to further detail our judgement.

7. Dead Ends, Open Questions

The steps performed in the last two paragraphs essentially represent the enactment of a

mixed scanning approach (Etzioni, 1967) which combines an analysis of PPP forms and

the review of a project’s progress. In our view, this method provides a valuable tool in

assessing the relevance of PPPs as a strategic option for the local government. Our early

evidence, however, seems to have led us to a dead end: regardless their action models,

municipalities seem, in fact unable to ensure either the design of innovative solutions

(Milan, Genoa, Trento, Parma) or the take off (Ravenna) of urban regeneration,

failing to deliver both the main promises of PPP. This paradox finds its explanation

in a still unresolved challenge: how to afford accountability for urban regeneration

within an inter-organizational environment. As we have seen, most local governments

still regard this aspect in principle as secondary (Milan, Genoa and Trento), but more

importantly, the drive towards better accountability comes at odds with the need to

secure a private actor’s long-term commitment to a project (as shown in Parma and

Ravenna).

This gap between goals and action cannot be attributed with certainty to an unfavour-

able environment for public decision-makers. All the projects observed have been devel-

oped, in fact, in the frame of a long-lasting and balanced relationship between the elected

officers and the administrative staff involved in the operations. One may question then

how much a private counterparts’ aims are overlapping the public ones and how far a



detailed action plan can work against or in favour of public–private cooperation.

Ravenna’s case clearly shows how easily even a consistent approach to strategy-making

and deal-setting leaves room for shifting involvements, which delay or even threaten

the delivery of the operation agreed upon. In this regard, existing research shows its

limits. On the one hand, it tells us that the public sector organizations should govern

such behaviours, but on the other, research has not thoroughly explained yet whether or

not it is always possible to find in the private sector goals and aims that may overlap or

match with the public ones. In other words, it should be asked to what extent private

sector organizations are capable of significant contributions in urban policy-making.

Perhaps, it is time to reflect on the “private sector’s invalidating features”: even when

public administrations engage in a long-term programme (such as in Ravenna), the

other actors could be unable to participate or follow. The difficulties of mobilizing

private organizations may be in part explained by the hardships in land assembly, or to

the fact that private operators may not necessarily be concerned about real estate

development.

In a way, a reconsideration of the innovative character and implications of PPPs in

urban regeneration is needed. One could argue, in fact, that public objectives of urban

regeneration should be resized in accordance with the “profile”, “interests” and

“history” of the “currently” available public and private organizations. On one extreme,

when the balance of skills and resources favours public administrations, PPPs may trans-

late into advanced forms of concession and procurement. On the opposite end, a private

business could intervene to stand for a weak and unresolved local government, assembling

the sparse and contradictory requests issued by the public authorities concerned in an

all-encompassing frame for action.

In conclusion, much has to be done to stimulate further research and public debate in

Europe and beyond. We think, however, that at least a first step has been made in

setting a common vocabulary, a tentative framework for analysis and a few anchor

points for the planning research agenda.

Notes

1. European Union, State Ministries and regional governments have been using grant schemes for financing

urban regeneration proposals submitted by local governments: the presence of preliminary agreements

between the public and private sectors is often used as a selection criterion on these occasions. The for-

mation of partnerships has been supported in the frame of the European Community Initiatives issued by

General Directorate for Regional Policies and the European Commission. Also, Ministries from several

member States have replicated this scheme: in the Netherlands, the Ministry for Housing and Planning

(VROM); in the UK, the former Deputy Prime Ministry Office; in France, the Ministere de le Equipement;

in Italy, the Ministry of Public Works and the Ministry for Transport and Infrastructures and similarly in

many other countries.

2. In order to gather and process information about the ongoing experiments, a number of National Govern-

ments have been promoting the formation of observatories for PPPs—consisting of governmental

agencies that provide technical support for public administrations, as in Ireland and the Netherlands

(Teisman et al., 2004). Elsewhere, non-profit organizations were created with the purpose of publishing

highly valued information for professionals and investors (for example, the Canadian Council for Public

Private Partnerships—CCPPP).

3. The snapshots are drawn from an in-depth analysis of PPP projects (Codecasa, 2008). Case studies are

drawn on a series of semi-structured interviews with project managers and secondary sources of infor-

mation (internal reports, policy documents, project briefings, local press articles) from October 2005 to

January 2008.



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public–private partnership: a delusion for urban regeneration? evidence from italy

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