Build It Big and They Will Come: ‘Billion Dollar Babies’ Reshape the Location Landscape

Call it “physiostructure.” We might as well, since
“infostructure” is now an established part of the site selection lexicon.

In fact, much of this SS issue is a veritable hymn to how information
infrastructure has dramatically altered where, when and how
we work, transforming a 9-to-5 workplace that was as tightly defined as the
facility walls that confined it. Instead, we now work
anytime/anywhere/anyplace.

Simultaneously unfolding, though, are a series of old-fashioned but hugely
influential physical infrastructure projects with equally awesome
transformational powers.

Physical infrastructure, of course, remains a critical business location
element. That?s obvious in this issue?s listing of some of the world?s major
projects (see pg. 819), which will substantially increase the surrounding areas?
site selection potential.

Today?s biggest infrastructure projects, however, are something else again.
Opening up vast land tracts and billion-dollar markets, they hold the potential to
forever alter the location equation.

China?s Dam Controversy

Matching that potential are dizzying capital expenditures.
Consider the US$28 billion price tag on the yawning Three Gorges Dam project
in China, designed to generate one-ninth of the power supply needs inside that
sprawling giant.

Scheduled for completion in 2009, the dam marks only the second time in
history that the Chinese have diverted the mighty Yangtze, the world?s third-
longest river. With its crew of 18,000, the project will create a reservoir a mile and
a half (2.4 km.) wide and 370 miles (592 km.) long.

A firestorm of controversy, however, matches the dam?s scale.

Immense size virtually guarantees debate. But the world?s largest
hydroelectric project has pushed the controversy quotient to tidal-wave levels.
Environmentalists uniformly vilify Three Gorges as an unmitigated disaster that
will dramatically increase pollution, flood valuable archaeological sites, wipe out
endangered species and destroy some 250 Chinese cities. Not to mention the
jarring relocation of up to 1.9 million Chinese, most poor and uneducated.

The dam should be halted, says Owen Lammers, executive director of the
International Rivers Network (www.irn.org), an environmentalists?
coalition. It will only strengthen Chinese hard-liners and keep all enterprises
state-owned.

Three Gorges, however, looks like an environmental Tiananmen Square.
Controversy won?t likely stop China?s relentless economic evolution, most
observers agree. In fact, many Chinese officials proudly regard the dam as the
modern-day equivalent of the Great Wall.

Libya Builds a River

Similarly great expectations (and lower-voltage controversy)
are riding on Libya?s Great Man-Made River.

At peak capacity, it will daily carry some 175 cubic feet (5 million cubic
meters) of water, aerating the barren northern Sahara Desert, one of the world?s
final wildernesses. That could create huge development opportunities for Libya,
with which the UK recently resumed diplomatic relations after a 15-year hiatus.
(The USA is also considering removing Libya from its terrorist nations list.)

The four-phase river, however, faces more long gaps. Though now partially
operative, history?s biggest water transport project won?t be completed until 2010.

Malaysia?s High-Tech Corridor

A more high-tech mega-infrastructure project is unfolding
courtesy of Malaysian Prime Minister Mahathir Mohamad, whose lofty national
aspirations drove the creation of the world?s tallest building, Petronas Twin
Towers.

Now the prime minister says he wants to create the Asian Silicon Valley —
the Multimedia Super Corridor (MSC), a nine-mile (14.4-km.) wide greenfield
area stretching 30 miles (48 km.) south from Kuala Lumpur City Centre (home to
Petronas Towers) to Kuala Lumpur International Airport.

The MSC project (www.mdc.com) underscores the interplay of
physical and information infrastructure in high-end facility locations. One linchpin
strategy, for example, would create two “smart cities.”

Putrajaya would become Malaysia?s governmental capital, housing 250,000
people. Joining Putrajaya near the MSC?s southern tip would be the more
business-centric Cyberjaya (meaning Cybercity), designed to nurture software
design and development, electronic publishing, film production, and Internet
service providers. Putrajaya?s other “precincts” would include shopping and
support services and a residential area for 100,000 people.

The MSC?s communal glue would be its electronic backbone, a digital fiber-
optic network linked to the United States, Japan and Europe.

The MSC?s potential (plus its lucrative incentives) have triggered substantial
corporate interest. Major firms that have either invested or plan to invest in the
MSC include AT&T, British Telecom, Intel, Motorola, NCR, Nippon Telegraph
and Telephone, Rockwell Automation, Sharp, Siemens, Sun Microsystems and
Sumitomo. Similarly, the MSC international advisory panel includes high-tech
luminaries like Microsoft Chairman Bill Gates and Sun Microsystems Chairman
Scott McNealy.

Even Big Boys Get a Bruise

By their nature, though, jumbo-size infrastructure projects
often teeter precariously. Such has been the case with the MSC.

The ringgit?s collapse triggered the nation?s first recession in 13 years, drying
up seed capital and spurring the almost two-year delay for the liftoff of MESDAQ,
a Malaysian stock market for new technologies modeled after the U.S.-based
NASDAQ.

Mahathir then further spooked business by introducing capital controls
pegging the ringgit to the U.S. dollar, which stopped investor profit repatriation for
a year and limited short-term capital inflows.

Finally, late last year Mahathir sacked and arrested a political rival, Deputy
Prime Minister and Finance Minister Anwar Ibrahim. With that, author and futurist
Alvin Toffler, an influential MSC advisory panel member, broke ranks and blasted
the prime minister.

“I do not believe this visionary project . . . can flourish in the present climate of
political repression,” Toffler said. “Can anyone imagine [creating] Silicon Valley
with political repression?”

Obviously, the MSC is a project to watch in more ways than one.

?Big Dig,? Big Payoff

But not all of today?s most significant projects are aimed at
opening up virgin business location turf. Many are unfolding in established
business hotspots where success has sired king-size problems.

One such project is Boston?s $11 billion Big Dig (www.bigdig.com),
an ambitious 11-year plan attacking choking traffic gridlock, a problem as
American as mom, apple pie and free-floating firearms. Boston?s gridlock is most
acute at the six-lane elevated highway linking downtown and the waterfront.
Designed in the ?50s to handle 75,000 cars a day, it?s daily crammed with
190,000.

The multi-faceted design includes adding a second tunnel under Boston
Harbor to Logan International Airport, plus replacing the outmoded six-lane with
an underground eight-lane that can carry 245,000 cars. The Dig will cut rush hour
by two hours, officials estimate.

Early on, though, critical slings and arrows besieged the Big
Dig. The Project On Government Oversight, a federal government watchdog
group, slammed it as “a renegade project” in a stinging 1995 report, “No Light at
the End of This Tunnel.”

Now, though, the Dig is widely regarded as a model for restoring aging urban
highways and strangled downtowns — in short, a case study in big-project
survival skills. The Big Dig?s redemption rested in mollifying local activists and
minimizing disruption — no mean feat when you?re excavating 13 million cubic
yards (16.9 million cubic m.) of dirt, enough to fill to the rim, 13 times, Foxboro
Stadium, the 61,000-seat home of pro football?s New England Patriots.

But project directors hired on-site noise technicians, repeatedly showered dirt-
carrying trucks and retrofitted equipment to limit pollution.

Expecting a critical earful, Big Dig officials also offered a disarmingly willing
ear. They funded many activists? pet projects, ranging from a Holocaust
monument to ginkgo trees in Chinatown. And funding additional rail and water
ferry service for downtown-suburbia commutes prompted environmentalists to
drop their court challenge.

But that accommodating style has been pricey. Add-ons account for one-
third of the project?s total cost.

Business, however, has embraced the smart-growth strategy. Says
Massachusetts Turnpike Authority Chairman James Kerasiotes, who?s
overseeing the Big Dig, We?re seeing a downtown development explosion, and
we haven?t even finished. By 2000, says Boston Chief Economic Officer Thomas
O?Brien, 4 million sq. ft. (371,612 sq. m.) of office space, 1,600 new hotel rooms
and 2,000 housing units will be built or under way.

The Big Dig, says Brookings Institution urban planning analyst Bruce Katz,
has positioned Boston to be the 21st century?s jewel of American cities.
Clearly, physical infrastructure retains its potent business-location punch.

    SS