Ocean & Coastal Management 92 (2014) 28e39
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Ocean & Coastal Management
journal homepage: www.elsevier.com/locate/ocecoaman
Publiceprivate partnerships during waterfront development
process: The example of the world exposition
Wen-Chih Huang a, Sung-Ken Kao b, *
a
b
Department of Transportation Technology and Management, Kainan University, Taiwan
Institute of Harbor and River Engineering, National Taiwan Ocean University, Taiwan
a r t i c l e i n f o
a b s t r a c t
Article history:
Available online
Normally waterfront development entails high profile projects that blend into the local developmental
requirements and the global economic situation. While various groups often wrestle with each other
during development of a waterfront, based on their own interests, seeks to find a dynamic balancing
point that will satisfy the prospects and requirements of all participants. In recent years, the trend of
urban development and construction is to integrate the publiceprivate resource and capital in order to
ensure the feasibility and continuity of project implementation. The large-scaled waterfront renewal has
been the main characteristic of world expos and plays an important role in PPP development. In this
research we have seen the how risk management is involved in waterfront development. The risk
induced and shared will depend on how involved the participants are in the project and on the financial
schemes used to fund any given project.
Ó 2014 Elsevier Ltd. All rights reserved.
1. Waterfront development process and redevelopment
Waterfront is the birthplace of human culture and economy.
Habitat by water from the earliest settlements to develop into
fishing village to become a trade stronghold sailing era, the era of
the rise of the container port industry in recent years, the Old Port
waterfront and then transition into a new look with a hydrophilic
space, Making increasingly frequent human activities have
increased the pressure on the waterfront has become one of today’s
globalization process, many of the major challenges facing the
waterfront city and opportunities (Malone, 1996). Research,
development and protection of the waterfront is the problem of
coastal States is very concerned about the current world,1 but also
catalyze the port city as the world’s link international role (Vallega,
2001).
* Corresponding author.
E-mail addresses: [email protected] (W.-C. Huang), [email protected].
net (S.-K. Kao).
1
Globalization has a great impact on Integrated Coastal Zone Management
(ICZM) which has been hotly debated in international community along with
marine environments and sustainable development starting with the 1992 Earth
Summit which took place in Rio de Janeiro, Brazil. Globalization enforces the idea
that ecological systems should be managed as a group, rather than managing them
as independent individual sites. Collaboration in managing the spatial, environmental and organizational dimensions is vital in this respect.
http://dx.doi.org/10.1016/j.ocecoaman.2014.02.007
0964-5691/Ó 2014 Elsevier Ltd. All rights reserved.
During the early development of port-cities, a physical barrier of
some kind such as a wall that separated docks from urban streets
was often a de facto means used to secure the port side from theft
and other disturbances. In recent redevelopments of obsolete waterfronts, much attention has shifted to pursuing a multiple use
pattern of commercial, housing, and recreational developments
that forces the end of the segregation of uses and transforms the
waterfront into a welcoming public space (Nagao and Yokouchi,
1997; Bird, 1971, Ircha, 2001; Sairinen and Kumpulainen, 2005).
In other words, the traditional functions of transportation and
manufacturing in the port-city have gradually been replaced by a
higher quality of living embraced by the local urbanites (Huang
et al., 1998, 2004). This is reflected in several demands for change:
1. The concept has shifted from sacrificing the ocean (exploiting
natural resources for economic development) to protecting the
ocean (minimizing environmental impacts), and finally to
restoring the ocean (rejuvenating and restoring aquatic
ecosystems).
2. During the process of waterfront revitalization, the ocean is
initially closed off to the public and the landscape is then converted to provide a friendlier environment; once the process is
complete, the waterfront plays host to a mixture of multiple use
activities.
3. At the port, marine transportation technology has been
modernized with increased vessel capacity, containerization,
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
29
automatic cargo/container handling, and the development of
port information management systems. This has helped the
industry shift its focus to low quantity, high value goods and
services from high quantity, low value goods.
4. During urban development, land acquisition demands space on
the waterfront and at the same time returns public space to the
people as land is transformed away from prior industrial use.
5. Local residents find their surrounding urban space and living
environment shifting from an emphasis on the working environment toward providing high quality ambience.
benefit. Therefore, the new waterfront includes various resources
including infrastructure, government-owned enterprises, private
sector investment and the city environment, etc. Waterfront
development reflects the economic system of the port-city
including both the harbor and urban economies and the integration of these two economies may have a multiplier effect. The
strength of this synergy depends on how the decision making entity adjust resources so as to provide the maximum public benefit.
Through the international experience that the basic management
concepts as waterfront redevelopment (Table 2).
Waterfront redevelopment trend for the past few decades the
trend in Europe and America, Japan, and the port city development,
in addition to involving urban renewal and re-use, but also to
commercial activities, tourism and recreation and urban open
spaces combined into one. Such as Yokohama Harbor 21st century
business plan (Minato Mirai 21, MM21), in addition to the development of Yokohama Harbor and horizontal play complementary,
the development process is also integrated into the urban redevelopment practices, by organizing fairs, the new international
conference center, art galleries and other buildings, creating a
spacious shade leisure facilities, the construction of convenient
public transportation system, making the city waterfront revival.
Because the development of relations background, the port city
also has a complex industrial structure (Hayuth, 1988), covering the
first, second and tertiary industry, including the original work
functions (such as artificial fishing port of loading and unloading
activities, container terminal transit transport) manufacturing
value-added features (such as coastal industrial zone, commercial
port of export processing zones), and type of service functions
(such as waterfront parks, commercial, communications, financial
centers, etc.). The development of a port city is similar to the
concept described in Alvin Toffler’s book The 3rd Wave (Toffler
1980). Toffler’s paper describes the experience as having three
phases and six functions. The three phases include: 1) value added
by physical labor, 2) value added by technology and 3) value added
by sustainability. The six functions include: 1) fisheries and physical
labor, 2) warehousing and transportation, 3) processing and
transportation/shipment, 4) supply chain management, 5) leisure
and sightseeing and 6) the city experience, etc. Each phase will
separately provide different requirements for supporting the lifestyle of human society, economic production and sustainable
ecology (Table 1 and Fig. 1). The course of this development represents the importance on the livelihood of mankind and industrial
and commercial activity by using the diversification of city-port
waterfront.
2.2. Waterfront redevelopment methods
2. A Systematic approach to the planning of waterfront
2.1. Basic principles of the redevelopment of waterfront
The overall urban economy needs to be explored from a wide
angle and emphasis should be placed on the “spill over” public
During waterfront development, public authority needs to take
a leading role during both planning and administration. A
comprehensive plan usually consists of many developmental projects, each of which may have a defined developmental parcel and
each with a corresponding planner/developer and independent
financing mechanism. Approaching the development in a systematic fashion by implementing five stages of the development, i.e.,
planning, design, construction, management, and operation, is
critical to the project’s success (Huang et al., 2008a, b). including: 1)
preparation of the overall objective, 2) analysis of internal and
external environment, 3) explore the functional orientation, 4)
determine the development unit and the developing body, 5)
develop methods to develop strategies and development and 6)
decision development order and action plan.
The establishment and categorization of the developmental
parcels in the urban development system is first important step
needed prior to engaging in substantial land development and
construction (Hopkins, 2001). Consideration should be given to the
suitability, compatibility and feasibility of waterfront development
and land use based on a comprehensive development plan or
various subsidiary plans in the renovation districts. Various
developmental parcels should be established so that each separate
area of land use can be managed independently. Parcels should be
categorized based on the evaluation criteria such as the size and
location of various parcels, and it functions and beneficial characteristics, etc. that will make up one of the basic key elements in the
overall development. Based on the internal and external benefits of
the various developmental parcels, five types of development can
be differentiated: 1) Infrastructure, 2) Public Enterprise, 3) Social
welfare Sector, 4) Private Business and 5) Natural, Historical &
Cultural Heritages (Fig. 2) (Huang et al., 2006).
The various units can be categorized based on whether the unit
generates income on its own (internal benefit) or it provides benefits which do not generate income (external benefit) for the
various developmental parcels and their corresponding subjects of
development (Fig. 2). Basically, developmental parcels with internal benefits are suitable for private entity development. If there is
no internal benefit or characteristics of a monopoly are present,
then the public entity will develop the parcel. If social welfare
characteristics dominate, then a third entity will develop the parcel.
Table 1
The three value-added stages of port-cities and their waterfronts.
Value-added
stages
I
II
III
Labor
Technology
Sustainability
Port-city
functions
Demands
Core values
Fisheries
Reprocessing &
Supply chain
shipment
management
Economic production
Maximize the efficiency and effectiveness of the industry
Recreation &
Urban
tourism
experience
Ecological sustainability
Enjoy eco-friendly activities
Transportation &
warehousing
Lifestyle/social
Provides work and basic needs
Create a vibrant and urban environment
Source: results of this research.
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
Operation Type
30
.Tourism/Experience
Enjoy eco-friendly Activities
Cultural Heritage
Monographic Study
Recreation & Tourism
.Processing/Supply Chain/Marketing
Marketing
Ecological sustainability
International Trade
Reprocessing & Transshipment
.Labor/ Transportation / Warehousing Reprocessing & Import/Export
Production/economic
Warehousing
Transportation
Lifestyle
Fisheries
Create a Vibrant Urban Environment
Lifestyle/Social
Developmental Stages
Fig. 1. The three-stages/six-categories of the development of port-cities and their waterfronts.
Source: results of this research
Waterfront development is complex and difficult. Normally, the
related enterprises require massive amounts of investment, have a
long period of return on investments and in the initial investment is
difficult to recover, etc. Therefore corresponding management and
operational knowledge is required. In deciding how to “internalize
the external benefit,” deciding on a reasonable rate of return on
investment, opening competition of charter fees and open disclosure of information, etc. are all important issues that will affect the
principle of impartiality for society. Especially for a port, the government shall become a part of the port management organization
and strive to maximize the external benefits and should not solely
emphasize the income generated in the organization (Fig. 3).
3. Publiceprivate partnership mechanism of waterfront
development
The global economic downturn and financial crisis waves of
humanity is currently facing a major issue, so that countries have to
cope with fiscal austerity inflationary pressures (Batley, 1996; Wu,
1996; Tam, 1999). This type of partnership involves a dynamic and
flexible process of cooperation.
Some scholarly research suggests (Kouwenhoven, 1993).
Sharing of risk and responsibility through the legal system can
strengthen the efficiency of public construction projects. Therefore,
some scholars recognize that this PPP model is better for budgeting
public construction projects solely through the use of government
funds. Also, some research shows that allowing the project to pay
for itself over time can allow private enterprises to earn reasonable
profit (Yu and Jiang, 2005; Soh and Yuen, 2006). Therefore for
private enterprise, a good PPP can have a tempting factor to stimulate their investment and gain reasonable profit. Also, government
can provide good quality public services without increasing the
public financial burden. Once the special permission expires, the
government can still retain ownership of the construction properties to avoid the creation of a monopoly by private consortium in
long-term.
In recent years, many publiceprivate partnerships related
literature, but almost no relevant monographs explore publice
private partnerships waterfront development. This research found
that some foreign cases, the port city waterfront development
today has actually adopted a considerable number of publiceprivate partnership model, many Although the national implementation of a market economy in the face of such a large and
important waterfront when development projects are still in the
public sector-led development of the body, or the establishment of
publiceprivate cooperation. The example of London waterfront
redevelopment (Hoyle, 1988, 2000a; 2000b), the British government based on land-use planning law (Planning and Land Act) was
established by the central government-funded London Docklands
Development Corporation, is a quasi-governmental organization
(semi-official bodies), responsible for Thames waterfront renewal
planning.
In this research we have seen the how risk management is
involved in waterfront development. The risk induced and shared
Table 2
The basic management concepts as waterfront redevelopment.
Concepts
International experience
Waterfront is a public
property
Since 1973, the Japanese government has declared that individuals or private corporations may not develop coastlines
and/or waterfronts independently, and that developers must at least have a legal/artificial person identity. In addition,
strict laws have been imposed on land acquisition and related transactions.
In the Netherlands, where the state claims ownership of 80% of the land, a state-designated waterfront authority has
incorporated local/community voices into urban planning. First, the public space and infrastructure are laid out; then
private parties can develop the remaining land.
For MM21, the planning process started in 1965. In 1983, a comprehensive plan was authorized which anticipated
completion of the planned development within 20 years. However, because of an economic downturn the plan was not
completed until recently.
The Port Authority of New York and New Jersey in USA controls the facilities of sea port and airport, railway and highway,
various transportation stations, bridge and tunnel in the neighboring area of the two states, this organization is an
autonomous finance state government department.
Baltimore Inner Harbor in publiceprivate partnerships and long-term planning, from a decadent old port, into a high-quality
space for parks, trails, recreation pier, cultural facilities, commercial facilities, both of old urban areas has prompted Baltimore
updated.
Government must be
involved in waterfront
development
Development should be
conducted while considering
long term goals and interests
Port administration and
management should not be
profit-oriented
Combine urban planning in the
restructuring of port space
Source: results of this research.
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
31
Internal Benefit
Public Enterprise
Social Welfare
Sector
(no possible income)
)
▲Postal Service
Private Business
▲Public Transportation
▲Gas Stations
▲Business Finance
▲Shopping Street
▲Hotels & Restaurants
▲Hospital & Care
▲Rail Operators
Authority
▲Water & Electricity Supply
▲Unions & Foundations
▲Port Traffic Control
▲Environmental
Protection Facilities
▲Trade Center
▲Fish Markets
▲Logistics & Warehousing
▲Shipping & Forwarding
Non-Authority
▲Education & Training
Facilities
▲Financial Institutions
▲Parks and Green Space
▲Port Services
▲Military Bases
▲Fishermen’s Association ▲Historical & Art (Museums)
▲Police Departments
▲Labor Association
▲Religion
▲Cultural (Waterfront & Underwater)
▲Port Authority
▲Transportation Facilities
(little/no income)
)
Social welfare
Sector
Infrastructure
Natural, Historical & Cultural Heritages
External Effectiveness
Fig. 2. Relationships between market form, organization, and benefit/effectiveness in a port-city waterfront.
Source: results of this research.
Government
predominance
Private Enterprise
Public-private
Partnership
Civilian Autonomy
Magnify the External Benefit
Fig. 3. Correlation diagram of the subject of development and development method of port-city waterfronts.
Source: results of this research.
nternal Benefit Externalization
Non-Authority
Private Business
Natural, Historical &
Cultural Heritages
Third Sector
Internal Benefit
Public Sector
Risk Diversification, Risk Tolerability and Risk Avoidance. Risk
management requires a system of constant correction. Because the
occurrence of risk is, by definition, uncertain, the developer cannot
completely understand all relevant information related to risks
during the planning, design and construction phases or in the early
period of operation (Tsai and Su, 2005). To ensure the adequacy of
risk management decisions, the developer has to continually update risk information during the execution of the plan and needs to
adjust its management strategy depending on known level of risk
Social Welfare
Sector
Public Enterprise
Infrastructure
Authority
Development
Method
External
Effectiveness
Subject of
Development
will depend on how involved the participants are in the project and
on the financial schemes used to fund any given project. A dynamic
balance point can be found with mutual cooperation of various
rights and interests to the related parties (Fig. 4).
Generally, waterfront development infrastructure requires a
huge amount of investment which provides a long period of return
(Moore, 1996). Risk management can be divided into two large
categories, internal and external risk (Kakimoto and Senneviratne,
2000). The main risk management has Risk Control, Risk Transfer,
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
Internal Benefit
Wealth
Natural, Historical
& Cultural
Heritages
Equality
Private Business
(not possible)
income)
Welfare sector
Government predominance
Authority
Infrastructure
Public Enterprise
32
Private sector autonomy
Non-Authority
(little/no income)
External Effectiveness
Fig. 4. Dynamic correlation diagram of waterfront development.
Source: results of this research.
in order to achieve adequate risk management. Since risk management can be divided into five types of waterfront development,
these risks can be categorized (Table 3).
The largest characteristic of PPP is the principle of joint sharing
of risk by the public and private entity. An intrinsic quality of the
PPP model is a kind of “risk-sharing partnership”. During the
planning and execution of the PPP, government and investors will
be shown the possibility of various and different kinds of unavoidable risk they may have to face. For example, during waterfront development, a developmental parcel that has internal
benefit may be suitable for a private entity to develop; a parcel with
external benefit or monopolized characteristic should be developed
by a public entity. A parcel with public welfare characteristics
should be developed by a third entity.
4. World exposition and city competitiveness
The Industrial Revolution in the nineteenth century pushed
transportation development and technology advancements to
enrich the appearance of cities, and included the origin of the world
expo in the UK in the mid-nineteenth century. The multipurpose
world expo provides a platform for demonstrations of new technology, of how the public can benefit from new technology, a way
to stimulate commerce, and provides a venue for festivities; this is
why countries to strive to be the host of such an event. For example,
with the Crystal Palace of The Great Exhibition of Expo 1851 London, the UK advertised the achievements of the Industrial Revolution, and also branded London as the world’s leading city. The
141-day exhibition drew 6.04 million visitors from 34 countries
who witnessed the first world expo.
Over the past 162 years, 33 cities around the world have hosted a
world expo event. Considered as the “City Olympic Games,” expos
provide cities with a stage for competition through culture, economics, and technology as well as stimulate a city’s spatial imagination to encourage multidimensional city development. Apart
from bringing host cities tremendous economic benefits as well as
opportunities for development, international exchange and cooperation, hosting a world expo creates social benefits and enhances
international awareness of the host cities. The 45 world expos
approved by the Bureau International des Expositions (International
Exhibitions Bureau, BIE) have successfully enhanced global awareness of the resources available in host cities. For example, London,
Paris, Vienna, New York, and Osaka have become famous tourism
spots after hosting a world expo. Hosting a world expo also provides
an opportunity for urban construction and turns part of the
exhibition venues into the spiritual symbol of the host cities. Examples include Le Tour Eiffel of Expo 1889 Paris, France, the Atomium of Expo 1958 Brussels, Belgium, the Space Needle of Expo 1962
Seattle, USA, and the Tower of the Sun of Expo 1970 Osaka, Japan.
In the globalization era, cities have become the pivot point for
social and economic development. Cities play an increasingly
important role and function in national economic development.
The fact that cities represent a country’s direct participation in
global competition has become the new global economic focus.
Since a world expo is both a super large public event as well as a
global event which combines national development needs and
global economic stimuli, host countries have wished to improve
their national status over time and enhance city competitiveness by
hosting a world expo. With the combination of globalization and
urbanization, a world expo is considered to be a miniature of city as
well as a regional development, and it has gradually become a
useful tool for city and regional development around the world. The
chain reactions of the indirect economic effects brought by the
world expo (Table 4):
5. Three-stage development of the world expo
From an ordinary trade fair to a thematic exposition, the world
expo has gone through a long evolution. The development of the
world expo occurred in three stages. 1) Before 1939, all world expos
held in Europe and the United States featured statistical exhibitions
demonstrating production technologies and advertising technological advancements of the host countries, and most expos were
under the direction of the royal family or government of the host
countries. 2) After WWII, thematic expositions began, hoping to
bring people together to discuss the future ways for humankind to
live together peacefully after the chaos of war. The world expos
held during this period were mostly organized by a committee
supported and supervised by the government of the host countries
to display national power. 3) After the Chernobyl disaster of 1986,
the largest catastrophic nuclear accident in human history at that
time, both the United Nations (UN) and BIE urged the world to
consider environmental protection and ecological issues more
seriously. The venue design of Expo 1986 Vancouver organized by
an NGO formed by the public and private sectors emphasized
environmental issues and turned from creating traditional exhibition halls to creating a park (Heller, 1999), where people could feel
the exposition atmosphere without entering an exhibition hall.
The three-staged development of the world expo is similar to
the concept in The Third Wave (1980) described by A. Toffler (Table 5
Table 3
Correlation of the main affecting risk factors in waterfront development.
Types of
development
Developmental
parcel
Publiceprivate partnership
Public utility
Private
enterprise
Main benefit
Main factor affecting risk Main factor reducing risk
Loss of life force
in everyday life
Tends to be
populist
Seek diverse cultural
knowledge under the
conditioning of
morality and law
Consumer’s culture
Stipulate regulations
with the help of the
public sector
Risk Avoidance
Competing with
the general public
for profits
Economic
degeneration
Create investment
opportunity
Operating income
cannot reach
expectation
The project risk is
reasonably shared by
various subject roles
Risk Tolerability
Financial burden
Profit making
in different
form
Flaw in budget
Standardize the public
execution
welfare objective of
private enterprise to
realize the maximization
of public interest
Investor has
development
opportunity in the
planning, design, work
execution, management
and operation phase
Risk Diversification Internal risk
Intervention by
public opinion
Selection procedure is
impartial and open
Risk Transfer
Heavy interest
burden
Government provides
strong support
Risk Control
Interruption due to Market
monopolized
unstable political
by plutocrat
situation
Ineffective
performance
Part of the fund is
transferred to
administration items
Makes use of private
Financial crisis
due to long-term enterprise competitive
investment
strength to enhance the
public utility efficiency
Risk model
External risk
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
Religion
historical & art
(museum)
cultural (waterfront &
underwater)
Private enterprise
Postage service
Public transport
Gas station
Business finance
Shopping street
Hotels & restaurant
Trade center
Fish market
Logistics &
warehousing
Shipping &
forwarding
Financial institution
External
Social welfare sector Education &
Effectiveness
training facilities
Hospital & care
Unions &
foundations
Environmental
protection facilities
Port services
Fishermen association
Labor association
Public enterprise
Rail operators
Water & electricity
supply
Port traffic control
Infrastructure
Parks and green areas
Military base
Police department
Port authority
Transport facilities
Internal benefit Natural, Historical &
cultural heritages
Main affecting factor of risk
Source: results of this research.
33
34
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
Table 4
The chain reactions of the indirect economic effects brought by the world expo.
The indirect economic effects brought
The chain reactions of the world expo
Enhancing gross national product
The sum of the investment and visitor consumption during Expo 2000 Hanover was V4.2 billion,
which equals the annual output of 65 000 workers in Germany.
From 1986 to 1992, Expo 1992 Seville created 194 000 direct and indirect job opportunities. Hanover’s
employment rate during Expo 2000 exceeded that of most other parts of Germany.
The old shipyard and industrial zone, previously used for storing sea cargo where Shanghai World Expo, 2010
Shanghai was held, were unimproved areas in need of re-development, and it was transformed into a new
passenger hub.
Expo 1992 Seville promoted the development of a comparatively backward region in southern Spain and
helped close gap in wealth between northern (richer) and southern (poorer) Spain.
Expo 2005 Aichi attracted tens of millions of visitors to Japan and created business opportunities worth
trillions of Japanese yen, and Chubu Centrair International Airport and the venue’s cable car system continue
to demonstrate their effect to push tourism development in Nagoya.
Creating job opportunities
Increasing land value
Promoting economic and trade growth
Stimulating investment intentions
Source: results of this research.
and Fig. 5): production-oriented / life-oriented / ecology-oriented. The entire process covers the following six themes: production technology, art and technology, progress and harmony,
science and civilization, environmental protection and ecology, and
sustainable development. Today, the world expo has evolved from
simple exhibitions into exhibits designed to encourage exploration
and participation.
6. Effect on world expo site selection of waterfront
conditions
The following factors need to be considered when selecting a
site for a world expo: demands for space, timing of events, theme,
city development policies, near-site public facilities, infrastructure
completion time and service capacity, site accessibility and passenger transportation capacity, and citizen cooperation. Two site
selection criteria relate directly to city development: 1) coordination with existing urban facilities and infrastructure which minimizes expenses by maximizing the use of existing facilities, and 2)
coordination with current urban plans for development to avoid
wasting the new investment in construction. A world expo can
accelerate the completion of previously planned projects so that
these projects can be used immediately after the world expo closes
(Huang et al., 2008a, b). The location of a city is one of the major
factors affecting world expo activities. Waterfront cities have hosted 89% of world expos (Table 6) suggesting the presence of a
waterfront influences world expo site selection. While hosting an
expo brings an opportunity for cities to re-establish their relationship to their own waterfront, organizing a world expo on the
waterfront provides a city with an excellent challenge to create a
new image of itself.
When organizing Expo 1873 Vienna, Austria dredged the Danube River and extensively re-engineered the old city area. This
successfully opened a new link between the city center and suburbs
of Vienna and turned Vienna into a beautiful metropolis. Although
Expo Yokohama 1989 was not sanctioned by the BIE, the site for the
MM21 Project had been an inaccessible shipyard and landfill. To
commemorate the 130th anniversary of the Yokohama Port and the
centenary of Yokohama City, the local government built a new international convention center and art gallery, constructed spacious
shaded recreational parkland, and renovated the convenient public
transportation system to revive the city’s waterfront during the
expo planning. In Expo 1998 Lisbon, Lisbon proposed a “Rediscovering Riverfront” master plan designed to re-structure Lisbon.
The plan included two interlinking elements: the dockyard redevelopment plan designed to promote the industrial use of the
abandoned industrial dock area and a new city center construction
plan designed to improve the functions of the new city center
where the expo was going to be held, including public facilities,
service industries, business areas, and residential areas.
Over the past century or so, large-scaled waterfront renewal has
been the main characteristic of world expos and plays an important
role in PPP development. When facing such large-scale and
important waterfront development projects, the public sector still
takes the lead in the on-the-ground development or becomes part
of a development body through PPP (Hoyle, 2000a, 2000b). During
Expo 1986 Vancouver and Expo 1988 Brisbane, the Canadian and
Australian governments both formed a local quasi-governmental
organization which used local land planning laws to take charge
of river/waterfront renewal projects. These successful projects
suggest that public sector intervention is required to ensure
equality during the development process since waterfront development involves tremendous changes to the land, matters related
to local development and to social welfare. In fact, using a PPP is the
only way to correct concerns about the internal effects in a way that
increases the overall effectiveness of the development in creating
beneficial effects; negative effects are usually neglected (e.g.
negative changes to the environment and landscape) generated
from the external effects of the development.
7. A systematic approach to the world expo
The planning of a world expo entails development of a huge
system designed to manage such a complex project. No other type
Table 5
The three Stages of World Expo Evolution.
Stage
I
Theme
Production
technology
II
Production-oriented
III
Life-oriented
Art and
technology
Progress and
harmony
Ecology-oriented
Science and
civilization
Environmental
protection and
ecology
Park exploration
Sustainable
development
Exhibition
Main exhibition hall
Landscape buildings
venue
Organization Directed by the royal family or government Dedicated committee formed and supervised by the government NGO formed by public and private sectors
Source: results of this research.
Theme Evolution
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
Ecology-Oriented
Environmental
Protection and
Ecology
II.
Life-Oriented
Science and
Civilization
I.
Production-Oriented
Production
Technology
Progress and
Harmony
35
Sustainable
Development
Park Exploration
(NGO formed by public and private sectors)
Landscape and Buildings
(Dedicated committee formed and supervised by the government)
Art and
Technology
Main Exhibition Hall
(Directed by the royal family or government)
Developmental Process
Fig. 5. The conceptual drawing of the three-staged world expo evaluation.
Source: results of this research.
of exhibition can compare with the scale of a world expo with the
large number of visitors, exhibiting countries, and large amount of
investment required. In this section, the correlations between the
distribution of expo benefits and local construction as well as the
importance of local resource integration and related issues are
investigated in terms of both the total effectiveness and internal
effectiveness of all the efforts that go into creating an expo. The
concepts used to develop an expo and factors that create its success
are elaborated. Lastly, mechanism used to develop a world expo is
described based on a systematic and logical planning framework.
7.1. Total economic effect and intern/external economic effects
In terms of economic development, the maximization of the
economic effect is the prime target of such large-scaled public
projects as the world expo. In other words, the maximization of
“output value” is the ultimate target. A world expo not only has its
own economic effect but also economically effects local and even
related regions, known as the spread effects (Chang and Chen,
1996). This study holds that one of the major missions of the host
city is to create an overall effect on local society before distributing
economic effects to other areas. The internal and external effects of
local development helps balance the development of society. In
general, a world expo brings external effects several times greater
than its internal and local effect. While the venue green space
initially generates no direct income of its own at all, the event
organizer needs to build and maintain green space to provide the
indirect benefits of having a recreational area for visitors which
embellishes the venue environment.
Instead of solely pursuing internal results, the mission of the
public sector is to create external benefits. In terms of either city
governance reform or regional development, in recent years there
has been the major trend to retreat from an emphasis on operations
to an emphasis on increasing the opportunities to generate external
effects. As for the development of individual city systems, increased
land values can best reflect the external economic effects of local
Table 6
Waterfront cities hosting world expos.
Host country
Europe
America
Host city
Lakes, rivers, and oceans
Expo year
UK
France
London
Paris
The Thames
La Seine-et-Marne
Belgium
Austria
Hungary
Holland
Germany
Italy
Spain
Brussels
Vienna
Budapest
Amsterdam
Hanover
Genoa
Barcelona
Seville
Zaragoza
Lisbon
Philadelphia
Chicago
St. Louis
San Francisco
Seattle
San Antonio
Spokane
Knoxville
New Orleans
Montreal
Vancouver
Port-au-Prince
Okinawa
Kobe
Shanghai
Brisbane
La Seine-et-Marne
The Danube
The Danube
The Amstel
The Leine
Genoa Bay
The Llobregat and the Besòs
The Guadalquivir
The Ebro
The Tagus
The Delaware and the Schuylkill
The Chicago and Lake Michigan
The Missouri and the Mississippi
San Francisco Bay
Lake Washington and Puget Sound
The San Antonio
The Spokane
The Tennessee River
The Mississippi and Gulf of Mexico
The Saint Lawrence and the Ottawa
The Fraser and the Burrard Inlet
Gulf of Gonâve
The Pacific Ocean
Seto Inland Sea
The Huangpu
The Brisbane
1851,
1855,
1900,
1935,
1873
1971
1883
2000
1992
1929
1992
2008
1998
1876,
1893,
1904
1915,
1962
1968
1974
1982
1984
1967
1986
1949
1975
1981
2010
1988
Portugal
United States
Canada
Asia
Haiti
Japan
Oceania
China
Australia
Source: results of this research.
1862, 1908
1867, 1878, 1889,
1925, 1937
1958
1926
1933
1939
36
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
construction, particularly the stimulus from infrastructure construction, which is very significant. In the waterfront redevelopment plan of Expo Yokohama 1989, finding the perfect
design for the public spaces enhanced the value of the overall
development project and created a brand new waterfront image for
the once abandoned riverside (Huang et al., 1998). Since the private
sector cannot take care of everything, the local government should
ensure construction can maximize the external effects of the
project. The public sector should invest in the initial phase of the
development project as a bridge for subsequent investments in
different forms (Gordon, 1999).
7.2. Economic effects and authority
Economic effects and authority are the core concepts of the
planning and development of world expos (Fig. 6). To ensure an
equal distribution of economic and other effects across the public
and private landscape, the public sector must justify the nature of
effects of various development projects. For example, consider the
venue planning for Expo 2005 Shanghai, businesses related to the
market mechanism usually contain internal effects, such as consumer products and services, since the ownership is free for trade,
it is apt to be monopolized, and its social influence is comparatively
small. In terms of the construction and operation processed by the
public sector, such as the corporate pavilions, the logistics; financial, restaurant, and accommodation facilities as well as leisure and
recreational facilities all contain aspects of internal effectiveness.
Utilities such as water supply, electricity supply, and telecommunications also contain internal effects, since this network system is
naturally a monopoly which can be associated with politics (if such
services stop, the world expo will be interrupted). Hence, they have
many reasons to be state businesses.
Since a world expo involves major national construction and
regional development, it is necessary to use the authority of
government and carefully select the target of development; land
acquisition and the right to operate businesses are the most
important factors to consider. Since infrastructure brings external
effects to the local area, local governments should direct related
projects to ensure the quality of the construction and maintenance
of infrastructure, which contain a need for a high level of oversight
by local authorities. Professional, regional, or specific charity
businesses, such as various theme pavilions, contain authority of
different levels. Since marketable products and services such as
private goods have limited effect on social welfare, they do not
require the use of authority. Commercial facilities on and nearby
the expo venue are “businesses” with the lowest need for oversight by authorities and can thus be operated by private
businesses.
7.3. Organizational structure
A world expo has extremely large effects. Past experience shows
that effects are not the only factor affecting the complexity of expo
development projects; the political issues involving the show or
use of power can affect projects; in addition, the need to create
sustainable and environmentally sound development and to treat
people and businesses fairly effect social development. In 1987, the
Chicago’s city government was forced to give up the idea of hosting
Expo 1992 because the city government and the State of Illinois had
disagreements related to who would have administrative power
over the event. This shows that competition among politicians and
organizations can abort an entire project. Expo 1876 in Philadelphia
also had liability and financial problems. Although the congress
supported the event at that time, it did not want to assume any
financial liability. As a result, private businesses were reluctant to
support the event, and the world expo ended in a severe deficit
of 53.7%. During Expo 2005 Aichi, the Japanese Government
attempted to solve environmental issues related to venue expansion by creating a winewin situation through PPP. Although many
interested groups participated in the event, the public sector still
Internal Benefit
Urban Facilities
Management facilities
Supportive service facilities
Squares
Green space
Parking
Transportation facilities
Infrastructure
Social welfare
sector
Theme pavilions
International
Organization
Basic educational
facilities
Social welfare
sector
External effectiveness
Fig. 6. Illustration of world expo development business.
Source: results of this research.
Private Business
Corporate pavilions
Public activity centers
Logistics
Residential areas
Business finance
Business offices
Leisure and recreation
Expo village
Museums and exhibition halls
Performing centers
Education and science
Cultural and historical relics
Non-Authority
Authority
Public Enterprise
Natural, historical & cultural
heritages
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
took the lead especially in the management of the construction of
infrastructure, planning, and regulating the event.
7.4. Development mechanism
The project development process requires five stages: planning,
design, construction, management, and operation. Since these
stages involve the need to use appropriate authority, to have fairness and equality considered, to execute the project efficiently, and
to distribute the beneficial effects to all involved, the stages are
important to the public sector in two ways (Huang et al., 2006).
First, development of an expo requires substantial planning. Second, the project planning and selection system needs to be created.
For a world expo, the first step is the overall spatial planning of
venues and the government has to exert its authority at this time.
Project system planning involves decisions related to the theme
pavilions, parking, landscaping, and public facilities. During the
design stage, current trends call for a responsible developer to
established design guidelines. In practice, private architects are
hired to do the design work, with the goal of using the private
sector’s talents and technology. During construction, the work
progresses depending on the presence or absence of internal effects. In general, a responsible developer should assign construction projects to private contractors who make a profit from related
construction activities. In management, instead of the “operational
management” of private enterprises, this refers to the right of supervision of the public sector. For this reason, the public sector
usually takes charge of the supervision of project. During the
operational stage, either the public or private sector is selected
based on internal effectiveness. The system set up for expo development is established to create a systemic and logical planning
framework for the development of individual units by the developers using the planned methods of development. After understanding the processed involved in developing the individual
departments, we can review and assess the sequence of events
needed to develop of related departments. This is very important to
the budget allocation and execution of the entire expo project.
7.5. Development units
First, development units need to be selected as the expo
development mechanism framework is organized. Therefore, based
on the nature of content of the master plan, development units can
be preliminarily divided into three levels: sub-plan, project, and
facility. A sub-plan may include several businesses; a project is the
detailed planning of a sub-plan whereby businesses or facilities are
defined in more detail. In general, this includes input from both the
developer and ancillary businesses with the preparation of clear
development targets and methods. The facility is the most concrete
and usually refers to a specific building or business. The classification criteria used for development units are established based on
the level of internal and external effectiveness and the level of
authority exerted of individual units. With authority on the horizontal axis (y-axis) and internal and external effectiveness on the
vertical axis (x-axis), utilities basically fall into the following five
development units: infrastructure, state business, private business,
charity business, natural and cultural heritage preservation, and
cultural business (Fig. 6).
7.6. Developers
Based on the form of the local system of government and the
concept of decentralization, businesses with internal effectiveness
should be assigned to private enterprises or groups (the profitable
part of construction or operation). With reasonable policies and
37
control are the priority, state business can also operate businesses
with internal effectiveness. In general, the government should
complete any infrastructure projects that require external effectiveness. With reasonable supportive measures, the private sector
may be involved in the construction or operation of infrastructure.
In advanced countries requiring efficiency and effectiveness, the
third sector is accountable for the exercise of authority to a certain
degree. Expo 1976 Montreal, Expo 1970 Osaka, Expo 1984 New
Orleans, Expo 1988 Brisbane, Expo 1992 Barcelona, Expo 1998
Lisbon, and Shanghai World Expo, 2010 Shanghai all established a
dedicated organization using a PPP to exercise authority through
the implementation of a flexibly operated organization.
7.7. Development methods
Apart from the technical feasibility of waterfront projects, developers should consider whether the project is effective, from both
of the standpoint of internal and external effectiveness. They need
to compare and assess various alternatives and to determine alternatives of scale. Development subprojects need to be prioritized
to ensure the most effective use of economic resources in a way that
ensures project success. From the public sector’s viewpoint, the
selection of businesses with high external effectiveness and high
levels of internal control should be prioritized. In addition to
budget control, the public sector should make sure all parts of the
project are properly connected to give the project a feeling of
coherence as opposed to random organization across the landscape; that is, the interdependency of projects should be considered during project prioritization.
Private investments in infrastructure are complex and difficult.
In general, investors need to make a huge investment, tolerate a
long period of return on investments, and suffer from a low rate of
return on investment. Therefore, determining how to internalize
external effectiveness, determine a reasonable rate of return on
investment, the open tendering of franchise fees, and financial
transparency are important issues affecting social justice. The PPP
concept is used extensively in world expo projects today. Huge
development projects such as the world expos usually involve
many related plans or construction projects. Therefore, the public
sector is usually unable to finance the entire project and needs the
private sector to invest in the efforts. The public sector can raise
funds from the government usual and specially designated budget
sources, by guaranteeing credit, and by direct financing. The private
sector can participate financially in such projects through general
investments or item financing. The development models for
infrastructure include traditional tendering, EPC contracts, PFI, BOT,
and OT. These models reflect the diversity of private participation in
the construction of infrastructure. Therefore, the development
method is determined after determining the location of the
development units and designating the developers based on the
required fund sources of the respective projects.
8. World expo and publiceprivate partnership
A world expo, particularly expos held in waterfront cities, is
closely related to the comprehensive revitalization of urban construction businesses and involves political, social, economic, environmental, and ecological factors. Since an expo requires very large
scale investment, neither the government nor private investors can
effectively promote a world expo project alone. From past experience, therefore, when dealing with a world expo project, instead of
relying solely on government’s leadership which takes care of
everything as has been done in the past, PPP coordinating organization structure and integrating resources has become a common
practice in project construction, management, and operation. This
38
W.-C. Huang, S.-K. Kao / Ocean & Coastal Management 92 (2014) 28e39
enhances project efficiency and increases social economic benefits.
Particularly, after the start of the twenty-first century, the newstyle of world expo encourages citizen participation. Apart from
demonstrating forefront technologies, citizens were invited to the
fair to create local industrial culture during Expo 2000 Hanover and
Expo 2005 Aichi.
1. In terms of organizational structure
During Expo 2005 Aichi, the Japanese Ministry of Economy,
Trade and Industry (MEIT) and Ministry of Foreign Affairs (MOFA)
also established the “Japan Expo Promotion Office” to promote and
coordinate the operation of related departments and enterprises
participating in and sponsoring the world expo. Basically, a world
expo should be organized by the local government, while the
central government co-organizes or supervises the process and
serves as a consultant to the local government.
2. In terms of Public participation
Public participation in a world expo brings many impacts to the
local area. Apart from forming the city foundation, the world expo
encourages public participation of the expo’s local community in
urban policy planning. This key factor affects the success of the
city’s planned construction for large international exhibitions. For
enterprises, the participation may include planning, operation, and
invitation of overseas manufacturers, particularly those making
large donations to the expo. Enterprise donations are usually used
for operational expenses and planning. Individual exhibitors are
responsible for the venue design, construction, and demolition. In
general, exhibition fees and donations should enjoy tax concessions; for example, in Japan, the profit can be exempted from tax
over a three-year period (Chang and Chen, 1996). The general
public can communicate with local businesses at the beginning of
the application process for expo organization. The members of the
public can also express their opinion of the theme selection. Land
acquisition needs the full cooperation from landowners. Organizers
should consider the opinions of local people when planning the
expo venues and their uses after the expo. The local general public
can also volunteer to provide services which promote the smooth
operation of the expo. The objections of citizens living near Hyde
Park created a considerable amount of trouble for Expo 1851 London. Fortunately, after patient communication with the locals, the
organizer successfully solved all problems and insured the smooth
preparation for the operation of the expo. During In site selection,
because Expo 2005 Aichi did not consult with local people, objections arose. Through further recruitment, enthusiastic citizen
groups became another power promoting the expo at its initiation.
3. In terms of financing
Expo host countries usually raise funds with three methods:
governments funding, enterprise investment or sponsorship, and
government/citizen donations. Funding for Expo 2005 Aichi
included came from two sources: direct construction fees of exhibition halls costing U135 billion and operational and managerial
fees of U55 billion. The central government appropriated a third of
the construction fees, local governments provided another third,
and the last third came from the sale of tickets and souvenirs as
well as from donations from private enterprises. The organizing
committee managed to provide the operational fees. Apart from
government appropriations, Shanghai World Expo, 2010 Shanghai
raised funds from loans, bonds, lotteries, trusts, mutual funds, going
public and selling stock in the operation, using other assets secure
loans, BOT, PPP (World Expo Web, 2010).
4. In terms of infrastructure
During the expo period, millions of visitors will spend very short
period of time in the host city, placing severe stress on and challenging the city’s infrastructure. Major city infrastructure includes
public transportation facilities, roads and bridges, landscaping and
green space, water and electrical utilities, as well as sewage treatment and garbage disposal. Apart from improving the image and
upgrading the utilities of the host city, the expo provides an opportunity to privatize infrastructure. Privatization of infrastructure
is a global trend. Apart from endless opportunities, privatization
can help relieve the government’s financial burden. The Montreal
Government completed planning an underground transportation
system in 1964 for the Expo 1967 Montreal. The planning included
laying out the details of the route locations and anticipating station
capacity, underground mall interchange stations, and shuttle bus
routes. The city government also implemented the long-term lease
policy for the underground mall (Cheng, 2007). Developers obtained the right to develop the underground mall through open
tendering. Although developers only paid rent monthly, they need
to pay for the cost of passage construction, management fees,
maintenance fees, and liability insurance. Today, the Montreal city
government does not need to pay for construction, management,
operation, and maintenance and yet enjoys the fame of a city with
great infrastructure. The Montreal government also successfully set
a good example of “reciprocity” in PPP.
9. Conclusions
Making increasingly frequent human activities have increased
the pressure on the waterfront has become one of today’s globalization process, many of the major challenges facing the waterfront
city and opportunities. Waterfront redevelopment trend for the
past few decades in Japan, Europe and America, the port city
development in addition to involving urban renewal and re-use,
but also to commercial activities, tourism and recreation and urban open spaces combined into one. Over the past century or so, a
waterfront influences world expo site selection. While hosting an
expo brings an opportunity for cities to re-establish their relationship to their own waterfront, organizing a world expo on the
waterfront provides a city with an excellent challenge to create a
new image of itself. Waterfront development is complex and
difficult. Normally, the related enterprises require massive amounts
of investment, have a long period of return on investments and in
the initial investment is difficult to recover, etc. Therefore corresponding management and operational knowledge is required.
When dealing with a world expo project, instead of relying solely
on government’s leadership which takes care of everything as has
been done in the past, PPP coordinating organization structure and
integrating resources has become a common practice in project
construction, management, and operation. This enhances project
efficiency and increases social economic benefits.
Acknowledgments
The authors would like to thank the National Science Council of
Taiwan for its support of research projects NSC 89-2611-E-019-032
and NSC 88-2611-E-019-004. Some results of this paper are parts of
those studies.
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