Private Cities Coming To Africa

Renaissance Partners, a Russian property development firm, is taking a (relatively) new tack on urban development: it builds private cities from scratch. 

According to Bloomberg, Renaissance is currently in the process of building Tatu City, a $5 billion project outside of Nairobi.

In Nairobi, where the population has been increasing about4 percent a year over the last decade, one in four residentslacks access to piped water and about 40 percent of people useopen-pit toilets, according to Kenya’s statistics agency. TatuCity, a 2,500-acre site about nine miles north of the capital,will eventually have 62,000 residents and include a stadium,technology park, hospital, shops, office towers and playgrounds,the firm said in October, when it started the project. TheNairobi Stock Exchange is in talks with Renaissance aboutrelocating there, Meyer said.

[…] Renaissance is now installing electricity and water lines in Tatu, which will function as an independent municipality, and expects the first buildings to be erected by the end of 2013, Meyer said. The firm will sign an agreement with Kenya’s government next week to include Tatu in the country’s Vision 2030 plan, designed to boost infrastructure.

 The firm has also acquired land outside of Lubumbashi for a similar project in the Democratic Republic of the Congo:

[Renaissance Partners] plans to build a 6,400-acre city in the Democratic Republic of Congo as it seeks tobenefit from Africa’s urbanization.

The Russian firm is working on a master plan for the newurban center after securing the land outside Lubumbashi, thecountry’s second-largest city, Arnold Meyer, RenaissancePartners’ managing director in charge of real estate in Africa,said in an interview in London. Renaissance is consideringsimilar projects in Ghana, Nigeria, Senegal and Rwanda, he said.

I’m curious about this. On the one hand, I have no theoretical problem with private developers creating city-sized developments. (Although it might be more accurate to call them town-sized, as a population of 62,000 is not actually that large.) On the other, I am skeptical of utopian ventures generally, and this certainly sounds utopian to me.

I wonder how these projects will fare on the basic priorities I suggested here.  My guesses would be:

  • Dealing with the problem of poop: +1.  It sounds, from the press coverage at least, like sanitation infrastructure will be touted as one of the Renaissance cities’ major benefits, so I assume they’ll follow through on that. 
  • Making disputes resolvable by means other than violence: +0.  My expectation is that these new cities will be part of the countries’ existing court systems, so I don’t expect much value to be added there.  On the other hand, there are some interesting things that could be done with alternative forms of dispute resolution, via an opt-in system for resident people and corporations.  (Memo to Renaissance: if you are going to do that, and could use a lawyer to help you, I’m interested.)  On a related note, I am curious about how policing will work in these cities.  Will they be government-employed “real” police? Renaissance-employed “security guards”? A mixture of both?  I can think of about a million potential human rights problems with this off the top of my head, but I’m not sure any of them are much worse than the status quo for urban policing in Kenya or the DRC.
  • Reliable infrastructure links to other cities:  +0.2.  This will depend on the relationship between the Renaissance cities and the governments of the countries in which they are located.  I would expect Renaissance to invest heavily in this area to ensure that the cities are viable.  However, unreliable transportation and other infrastructure links would be an obvious way for government officials to exert control over the cities and extract rents from them, so I think there’s strong potential for killing the goose that lays the golden eggs here.  (Maybe less so if the stock exchange actually moves to Tatu City?)
  • Making Citizenship Meaningful: -1.  A private city, which provides goods that the government is supposed to provide but doesn’t, and is limited to the privileged, does not seem like it is good for the project of making citizenship meaningful.  In fact, I think one could be forgiven for perceiving it as an admission that citizenship isn’t very meaningful at all.

Total: +0.2.  So, a net positive, but a pretty weak one.  And, of course, they may also do very well on the more varsity-level services, like schools, parks, and public transportation.  All in all, I am definitely curious to know more about this.

Have any of you had direct experiences with the Nairobi and Lubumbashi developments?  What are your thoughts?

(H/T Marginal Revolution.)

Amanda Taub

4 Comments

  1. I could be very wrong, but Renaissance Partners, the property investment arm of the Renaissance Group, which is owned by Renaissance Capital, which was refinanced by ONEXIM, the company started by billionaire Nets owner Mikhail Prokhorov when he split up with his partner Vladimir Potanin and sold his share of Norilsk Minerals, looks like something of a sham. Prokhorov only invested something like $500 million to save the bank from collapse (and a D credit rating with a negative outlook), so I'm not sure how they are now financing several multi-billion dollar projects or what experience they even have in these kinds of ventures, since the whole structure is superficially similar to the typical puppet banks oligarchs have traditionally used to move money around and, often, bilk people out of lots of it. (Prokhorov is also the head of the 'Right Cause' party which is believed to be a fake liberal party in Russia). Maybe it's for real, but I wouldn't hold your breath waiting for these cities to actually open for business. And if you want to know what life might be like in a oligarch-built and run city, just look no further than Sochi.*

    *Disclaimer: this information is based on gut feeling and approximately 5 minutes of research on dodgy Russian Web sites and Wikipedia. Take with a grain of salt.

  2. I felt queasy when I read your post, mostly because of the Utopianist implications that you mention (one person's Utopia is another person's Hell), and because of the authoritative bent that can be found in planning….and then came across this today, which I thought you might be interested in: http://www.newstimeafrica.com/archives/20837.

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