The century of cities

The transformation of cities represents a major opportunity for Ferrovial. We have our own and differentiated model for the efficient provision of services, one that meets the greatest challenge of local administrations: to generate savings, to improve the quality of public services and to foster citizens’ participation.

On this sixtieth anniversary, Ferrovial Servicios celebrates 20 years since it began its activities. In 2003, Ferrovial decided to emphatically and very bravely commit to internationalisation and diversification in this sector. In April of that year we launched a takeover bid on the entirety of Amey, one of UK’s largest operators. A few months later we acquired Cespa, a leading company in the environmental sector in Spain.

In this decade, Ferrovial Servicios has multiplied its size by 10 and operates in more than half of the principal Spanish cities and in 130 major European cities. It maintains more than 19,000 kilometres of roads, a million lights and 48 million square metres of green spaces, at the service of more than 22 million citizens.

Looking to the future, no-one can doubt that cities will be acquiring growing prominence worldwide. For the first time in history, more than half the population (around 3.5 billion) lives in urban areas. While they occupy barely 1% of the entire territory, cities consume 75% of the energy and emit 80% of the greenhouse gases. If the 20^th was the century of nations, the 21^st will undoubtedly be the century of cities.

Ferrovial has gained a privileged position thanks to its differentiated portfolio and its capacity to meet the needs of cities. Of the annual budget of cities (50 B€ in Spain; 68 B€ in UK), more than a third is accounted for by the services we are currently providing.

Ferrovial Servicios has developed a model to address this challenge. We are a young and dynamic company that is capable of optimising energy operations and consumption, or of maximising recycling and transforming waste into energy. Our value proposal is eminently practical and is underpinned by the following four pillars:

• Long-term public-private collaboration leads to innovation and investment. Investment is essential to change the status quo, and to this end a strategic relationship with the client is necessary. The sector has to evolve from the short-term contract to the concept of association or partnership. Good examples of this durable union are Birmingham and Sheffield in the United Kingdom or the case of Murcia in Spain. In just these three cities we are going to invest more than a billion euros over the next few years.

• The integration of services leads to savings through synergies and economies of scale. The current fragmentation of contracts, which the administrations manage in a disaggregated way, is one of the most relevant sources of inefficiency. We have identified a major potential for improvement in this regard and experience has shown us that integral management allows us to generate savings of up to 20% in the budget.
  

• The sector has to evolve from the control of means to the measurement of results. The traditional system of provision focuses only on the human resources and materials that the supplier places at the disposal of the contract. Yet it is advisable to develop new compensation formulas based on objective indicators that provide incentives to innovation, service quality and achievement of results.
  

• The citizens themselves must become involved in the provision of services and have their contribution recognised. The internet and the intensive use of smartphones and social networks enormously facilitate this communication. Citizens have to be heard and can also contribute important added value when it comes to reporting incidents, reviewing the state of the infrastructures, appraising the quality of the services and participating in the definition of a city’s priorities, to give only a few examples.

This is our concept of the Smart City. It is ultimately a question of integrating the economy, governance, mobility, the environment and citizens’ participation to contribute to the improvement of the quality of life in our cities.

In the past 60 years, Ferrovial has kept intact its vocation of serving society, its spirit of permanent improvement and that innate determination to do things differently. These abilities, applied to the evolution of cities, represent an important opportunity for growth in the coming years.