‘How to procure a smart city district? The Re:Špitálka project’

Lukáš Grůza works in the Department of Strategic Development and Cooperation of the Brno City Hall, as the project manager of the Smart District Špitálka and an evaluation specialist. Previously, he was responsible for coordinating Smart City activities across the city. He graduated from Masaryk University in Brno. 

What is the Smart District Špitálka Project? What are its objectives?

The Smart District Špitálka project is one of the City of Brno’s strategic projects. It was initiated thanks to the City of Brno’s participation in the European project RUGGEDISED, one of the Smart Cities Lighthouse projects of the Horizon 2020 funding programme. We also call the project Re:Špitálka (you can find out why on the website: respitalka.brno.cz). The objectives of Re:Špitálka project are two-fold. It aims to 1) accelerate the transition towards climate neutrality through innovative development. By implementing and testing innovative technologies and approaches in the compact area, I believe, this will significantly help to accelerate the spread of this knowledge and experience to other areas and development projects across the city. And 2) this project should be a strong impulse for the development of the wider area and thus kick-start its overall much needed transformation.

We understand that you had preliminary market consultations, can you tell us more about these?

Yes, we had two rounds of preliminary market consultations. During the first round we discussed with potential strategic partners mainly the urbanistic-architectural design of the smart district, which is defined by the Špitálka Masterplan. As well as the functional and technical design, which is described in the White Paper of the Smart District Špitalka project. The White Paper defines the technical parameters of the future development in quite a bit of detail, including its smart aspects, such as the blue-green infrastructure, the involvement of renewable energy sources, how the energy system and its management will work, the technical requirements of buildings, and circularity of the site, etc…

During the second round, we mainly discussed with partners the development and characteristics of a suitable business model. We would like to minimise the initial investment costs from our side as a city. However, at the same time, we also want to maintain our influence on the project as such. For this reason, during these consultations, we used a lot of terms such as public-private partnership or joint venture. The main document for this part of the consultations was a financial pre-feasibility study.

We started each round with a collective joint consultation, which was always followed by individual consultations with the individual interested parties.

What has been the lessons learned from these preliminary market consultations? 

It is evident that investors and developers are not afraid of new challenges and approaches. This applies both to the use of modern technologies and to the use of more innovative approaches in financing and business models. For example, the PPP model is not yet very well established in the Czech Republic and the projects implemented in our country under this scheme are in units. Nevertheless, the partners are having constructively exchanges with us about this possibility. Thanks to the implementation of the EU taxonomy, investors are actively looking for sustainable and environmentally friendly projects. Projects like ours will thus have an advantage in the coming years, and the investors are aware of this, which helps us a lot. 

In terms of technical design requirements, we were surprised to be told that if we profiled ourselves as a smart district, we could use even more innovative technologies that are on the market. We are trying to be as sustainable as possible, while at the same time economically viable in the long run.

What can we expect from the 3rd round of market consultations?

Based on the feedback from the previous two rounds of market consultations, we have refined and clarified the direction that we want to take with this project and how to proceed also in terms of a feasible and preferred business model. We would now like to discuss this direction again with the selected partners to see if this is a viable option for them as well. During the third round, we would also like to raise with them the question of how the tender for the strategic partnership and project implementation should be set up. We need to be sure before the tender is launched that it is transparent and open for the widest possible number of potential bidders.

How have you engaged stakeholders throughout the project so far?

We really try to be active with this. Whether it was in the preparation of the Masterplan, where we involved relevant partners not only from the locality itself, but also from across the city, the municipality or city companies – or during the development of the White Paper where, for example, we organised a series of roundtables on individual topics of the smart cities concept. These half-day roundtables were attended by more than twenty people every time, where experts on individual smart cities topics discussed with us the possible design and the future innovativeness of the place. The insights from these roundtables served as the basis for the White Paper. The roundtables were held on the topics of Electric grid; Thermal Grid; Data and ICT; Smart buildings; public space and blue-green infrastructure; Community and the sharing economy and the circular economy.

At the same time, we are already trying to make the place as active and as open as possible. To get under the Brnoers skin as much as possible, we organise guided tours, lectures, exhibitions in the city, etc…
Last year, we also assigned the topic of temporary use and activation of Špitálka to students in the inter-university student competition MUNISS (more information is available online). We received very good proposals on how to use the place until the complete redevelopment of the site starts.

When will the tender documents be issued? And how are you preparing for those? 

We would like to complete the preliminary market consultations this year and start drafting the tender documentation for the strategic partner. The tender will most likely take a form of a competitive dialogue. The specification of the construction programme and development execution will thus be part of the tender itself. Therefore, the specification of the project will not end with preliminary market consultations but will also be carried out as part of the tender. We expect the tender to be launched within the next year.

What advice do you have for other cities that would like to procure revitalisation works of a city district? 

Don't be afraid to involve investors and developers right in the initial planning stages of projects and urban revitalisations. Their participation will help shape the project to realistic contours.

Project Re:Špitálka