The invisible infrastructure beneath our feet
19 / 11 / 24 - 6 minute read
With the rise of smart cities, urban areas are becoming more connected and efficient. A town in southern Italy, determined not to be left behind, is embracing this digital transformation and aims to deliver benefits to residents through increased efficiency and safety.
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Cities’ ‘nervous systems’
Our cities of concrete, glass and steel now rest atop a vast and growing underworld of computers, internet of things (IoT) devices and software. This forms a nervous system that invisibly supports the daily lives of billions, managing everything from traffic lights to public lighting and the dispatching of ambulances. Package deliveries, elevators, air quality monitoring, the irrigation of parks and gardens and more can be managed to create a seamless flow in our bustling environments.
This massive infrastructure upgrade is the most extensive our cities have undergone since the installation of electric cables, water mains, sewerage pipes, subway tracks and telephone lines over a century ago. Its digital nature is giving rise to a new kind of city: the ‘smart city’ – and the transformation is only starting.
“People often ask: ‘What is a smart city?’,” says Jose Martinez-Artiles – an Investment Director at PATRIZIA Infrastructure. “It’s hard to answer because everyone has their own definition.”
Instead, he points to Barcelona, London and Singapore as three cities using innovative technology and data to improve urban living and resource management. Barcelona excels with smart infrastructure, efficient transportation, sustainable initiatives and digital government services. Singapore stands out with its integrated Smart Nation vision, smart urban mobility, extensive digital governance and sustainable urban solutions.
London is renowned for its advanced transportation systems, CCTV density, data-driven governance and community engagement through open data. These cities lead the smart city movement by leveraging technology to enhance sustainability, efficiency and citizen services.
Yet, beyond the famous cities, many places remain untouched by this digital transformation. PATRIZIA sees business opportunities in that. In Spain, the United Kingdom and the United States, PATRIZIA investments bring fibre connectivity to underserved and rural communities. In Italy, PATRIZIA is retrofitting streetlight infrastructure in over 300 cities and the company is about to upgrade an entire town to become ‘smart’.
Jose Martinez-Artiles, Investment Director at PATRIZIA Infrastructure
Singapore - one example of what is deemed a 'smart city'
Big Bang approach to smart city transformation
Molfetta – a small harbour town of 60,000 people on the east coast of Italy – boasts spectacular sea views and a beautiful historical centre dominated by the 11th century Duomo di San Corrado cathedral. Regarded as one of the most stunning coastal towns in the Puglia region, Molfetta is now taking a 'Big Bang' approach to become an interconnected urban hub.
Molfetta
The town plans to integrate cutting-edge digital infrastructure, including urban connectivity, CCTV and augmented reality, to improve public services such as traffic and parking management, as well as environmental monitoring. Real-time data from a centralised control room will optimise city functions, enhance public safety and promote sustainable practices.
The project also incorporates a digital twin – a virtual representation of the urban landscape – to enable continuous real-time monitoring, predictive maintenance and scenario simulations to optimise performance and reduce risks.
“This is a landmark project for us because Molfetta is going ‘all in’ on smart city technology,” says Jose enthusiastically, as PATRIZIA portfolio company Ottima has signed a binding agreement with the developer of the project.
He explains that PATRIZIA is active in Italy with three innovative streetlighting companies. Together, Ottima, Selettra and Atlantico represent a €260 million portfolio, making PATRIZIA the second largest independent player in the Italian sector. Across these investments, there are 380,000 lightpoints throughout Italy and contracts with over 180 municipalities.
Typically, the companies approach capital-constrained Italian councils with a compelling pitch. The companies retrofit traditional lighting systems with smart LEDs and provide the required upfront capital expenditure to deploy the infrastructure. For the councils, it’s a win-win situation: they upgrade their lights to the latest standard, while the smart LEDs reduce electricity bills by 60-75% or more and maintenance costs by over 60% from day one. In return, PATRIZIA seeks a long-term, inflation-protected concession fee of 15-20 years to support system operations and maintain the infrastructure during this term.
“The overwhelming benefits are immediately obvious to councils, and they readily agree,” explains Jose. “As they become more comfortable with the smart solution, they want to roll out additional smart city solutions and enhancements, which we can provide.”
For example, the light posts can also be used to deploy electric vehicle (EV) charging stations, solar panels for generating electricity or cameras that can assist with smart traffic control and parking.
‘All in’ on digitalisation
“The difference with Molfetta is that the council was convinced by the benefits of the smart city approach and decided to go ‘all in’ rather than implement a staggered approach,” says Jose.
In the first stage, Molfetta is digitally scanning all structures to create a digital twin of the town. This digital twin will enable real-time monitoring of infrastructure health, optimising maintenance schedules and facilitating strategic urban planning.
The benefits will be immediately noticeable for residents with the installation of license plate readers. These devices enhance security by tracking stolen vehicles and monitoring traffic flow, leading to reduced crime rates and improved emergency response times. They will also streamline parking management and congestion control in this popular seaside destination, increasing overall efficiency and reducing pollution, especially during the summer months where the town receives tens of thousands of visitors.
Expanding EV charging stations is another significant aspect of the project and a vital step towards sustainability. This initiative boosts green transportation by reducing carbon emissions and pollution, encouraging the adoption of EVs and decreasing reliance on fossil fuels. Beyond the environmental benefits, Jose notes that the presence of EV charging infrastructure can stimulate local economies by attracting eco-conscious residents and visitors, thereby promoting sustainable urban growth.
“The difference with Molfetta is that the council was convinced by the benefits of the smart city approach and decided to go ‘all in’ rather than implement a staggered approach.”
Jose Martinez-Artiles, Investment Director at PATRIZIA Infrastructure
And one app to inform them all
For residents, access to city services and information will be simplified by a unified app that effectively reduces bureaucratic hurdles by digitalising city services. This one-stop app streamlines the reporting of urban issues, making it quick and efficient for residents to communicate with city authorities. Additionally, it enhances public transport experiences with real-time bus tracking, allowing users to plan their travel more effectively.
The app also functions as a digital bulletin board, keeping the community informed and engaged with the latest updates and events. Special attention has been given to ensuring the app is user-friendly for senior citizens – an important consideration in a town where more than 25% of residents are aged 65+. An easy navigation interface makes smart city advancements accessible to all community members.
Jose emphasises that key to unlocking smart city initiatives is educating city administrators, especially in smaller or rural cities. These leaders often miss out on innovative solutions due to a lack of awareness of what digitalisation can achieve. Once shown, most become advocates of the approach.
Despite these hurdles, opportunities abound. Low technology penetration in many cities means significant potential for new infrastructure. “Smart parking, water and gas meters, waste collection, fleet management, prioritising public vehicles – we have a long list of beneficial innovations that can be introduced through digitalisation, provided they meet the needs of the city and the residents support them,” says Jose.
