Social and Organisational

This chapter describes how large

engineering projects can be powerful

enough to cause significant change to occur

in the existing institutional frameworks of

countries, regions and industrial sectors in

which they are developed, and how some

projects clearly break the rules of the game

to create new paths. Large-scale

infrastructure projects ($500 million - $2

billion) raise interesting questions about the

economic foundation of the forces of change

in the built environment. An economist’s

perspective of building activity helps to

provide an understanding of how

institutional innovation (new rules and

frameworks enabling the delivery of

projects, games and sets of engagements

framing them) takes place and the signif

icance of initial coordinating mechanisms on

the final attributes and impacts of a project.

Research by the International Programme

for the Management of Engineering and

Construction (IMEC) informs the argu ment

presented in this chapter. IMEC was an

empirically grounded research initiative on

large-scale infrastructure projects

conducted over the period 1994–1999. Key

insights and lessons learned on the process

of delivering complex projects are discussed

in this chapter by referring to case studies

developed as part of the research

programme. The concept of ‘institutional

breaker projects’ (Michaud, 2001) is used to

describe projects where key stakeholders

entice major changes to social institu tions

and regulations in order for their project to

be approved, financed, built, and operated.

How these projects release various sources

of ‘latent’ innovation (institutional,

organisational, and/or technical innovation)

has implications for understanding (and

improving) cross-cultural exchange of

technology and knowledge. Trade-offs

between these types of innovation are

highlighted, with lessons and implications

for improving the ‘front 270 Buildings,

Culture and Environment end’ development

of smaller building projects, especially for

the delivery of environmentally progressive

buildings appropriate to their social, cultural

and economic context. The chapter

addresses macro-processes of project

delivery, as opposed to detailed analysis and

explanation of specific interventions by stake

holders. Therefore, the implications of

projects on the local economy, culture, and

environment are approached in a more

general fashion. Research on large-scale

infrastructure projects The IMEC research

programme was a four-year international

industry–government–university

partnership launched by a team of

industrialists and researchers in 1994 to

analyse best practices in complex large-scale

engineering projects.1 Sixty detailed case

studies of recent projects were developed as

part of the programme. The author was the

programme manager and field research

coordinator of IMEC. Projects analysed are

shown in Table 16.1. The programme’s initial

goal was to explore the premise and limita

tions of the project management literature

in explaining project perform ance. The key

idea was that the front-end development

phase (i.e., the early shaping stages of a

project) was fundamental to its performance

and success. Moreover, the front-end

development stage was equal to or even

more important than the project

management skills deployed during detailed

design and execution. The front-end stage

was shaping the project’s governance

framework in a way that later defined its

ability to resist risks and pressures and to

embrace opportunities for enhancement.

These premises were largely confirmed by

the research, comprising representative

projects from various sectors, countries, and

practices for the development, financing,

and construction of infrastructure projects.

The underlying empirical research process

consisted of three exercises. First, for each

project, searches were made in secondary

sources (e.g., Reuter, ABI Info, Engineering

News Record, and others) to track 1A book

synthesising key findings of the IMEC

research programme was published in 2000.

See reference to Miller and Lessard (2000) in

references. Table 16.1 Projects analysed in

the IMEC Research Programme

Hydroelectric projects • Bakun (Malaysia) •

Birecik (Turkey) • Caruachi (Venezuela) •

Freudenau (Austria) • lgarapava (Brazil) • ITA

(Brazil) • Kazunogawa (Japan) • La Grande 1

(Canada) • Lambach (Austria) • Machadihno

(Brazil) • Old ITA (Brazil) • Pangue (Chile) •

Pehuenche (Chile) • Ralco (Chile) • Tucurui

(Brazil) Thermal and nuclear power projects

• Bergen (U.S.A.) • Civaux (France) • Clover

Power (U.S.A.) • Gazmont (Canada) • Hub

(Pakistan) • Indiantown (U.S.A.) • Lambdon

(Canada) • McWilliams (U.S.A.) • Nanko

(Japan) • Navotas 1 (Philippines) • North

Branch (U.S.A.) • Ocean State Power (U.S.A.)

• Paiton (Indonesia) • Port Dickson

(Malaysia) • Subic Bay (Philippines) •

Sumatra (Malaysia) Roads, tunnels and

bridges • BNPL (France) • Cofiroute (France)

• Highway 407 (Canada) • M1–M15 (Austria)

• Mexico Road Program (Mexico) • MUSE

(France) • Confederation bridge (Canada) •

Prado Carenage (France) • Second Severn

Crossing (U.K.) Oil projects • Andrew (U.K.) •

Copan (Canada) • Njord (Norway) • Vigdis

(Norway) Technology and other projects •

Boston Harbour Cleanup (U.S.A.) • CAMSIN

(Canada) • Euralille (France) • Gardemoen

(Norway) • Lambdon flue-gas

desulphurisation (Canada) • Service Ready

Plane (Canada) • Telerobotics (Canada and

France) Social and Organisational

Understanding of Stakeholder Interests 271

• Wabash River (U.S.A.) • Third Dartford

Crossing (U.K.) • Thames Water Ring Main

(U.K.) 272 Buildings, Culture and

Environment information in the public

domain. Public documents, memoranda, and

prospectuses on the projects were also

gathered. Second, structured individual

discussions (typically two-hour interviews)

took place with senior managers of the most

important parties linked to each project

(e.g., sponsors and entrepreneurs,

government officials and civil servants, f

inancial advisers, regulators, engineering

and construction firms, equip ment

suppliers, and social groups). Structured

narratives were written to capture the

content of interviews. Third, a set of

questions rating the context, the project

risks, and a number of process and

performance vari ables was addressed by

respondents and researchers. Project

performance was designed as a multi-

dimensional variable, in order to capture

assess ment of environmental performance,

cost and schedule performance, eco nomic

impact, and other measures. Multiple stages

of project development The case studies

clearly unveiled the long and often tedious

process a project undergoes prior to its

detailed planning and execution. A project

that typically requires three to four years to

design and build can take, up front, more

than twelve years for its conceptualisation,

formal structur ing, and approval. Front-end

analysis and negotiation for the division of

rights and obligations between key

stakeholders is a fundamental reason why

their development is long and complex. For

many aspects of the project, sponsors must

act as active agents of change and create

new space to modify laws, regulations,

established practices, and standards. For

example, the case studies (full details of

which are found in Michaud, 2001) reveal

the following: • The Confederation Bridge

project in Canada required the passage of

two pieces of enabling legislation: an

amendment to the Canadian Constitution

Act of 1982 to authorise the private

undertaking of a f ixed-link project through a

federal subsidy agreement and imposition of

user toll fees; and the Northumberland Strait

Crossing Act to autho rise the complex

financial engineering model adopted and the

division of rights, risks, and obligations

proposed. • The Third Dartford Crossing

project in the UK brought significant changes

to the prevailing institutional framework.

The proposed finan cial structure created the

possibility of extracting a revenue stream

from the existing two Dartford tunnels to

partly finance the cost of construction of the

third river crossing at Dartford. The project

required Parliament’s amendment of bills to

transfer ownership of Social and

Organisational Understanding of

Stakeholder Interests 273 the existing two

tunnels and their approach roads (from

Essex and Kent County Councils to the

Transport Secretary). In addition, the design

of a new hybrid bill by Parliament was

needed to authorise the Trans port Secretary

to lease the new bridge and existing two

tunnels to a private operator. The project

served as a benchmark to develop the UK

government’s Private Finance Initiative,

which encouraged the par ticipation of the

private sector in a number of infrastructure

projects traditionally managed and financed

by the public sector. • The Hub Power

project in Pakistan was innovative in many

respects. It was the first time private equity

was being raised on an international basis for

a power project that was still at the stage of

conceptual design. Negotiation of the major

contracts with the Pakistani government

(namely the electricity tariff, the purchase of

power, and oil availabil ity) required many

institutional adaptations within the country

and frequent interventions from the World

Bank. The financing of Hub comprised a

complex web of local and international debt,

equity, and guarantees, considering the

country’s high-risk profile. The novelty of the

various agreements and guarantees set

between the government and the private

developer company served to design the

new power policy of Benhazir Bhutto’s

administration in 1995. Other case studies

testify to the complex processes

characterising projects at their early stage of

development and the impact they

subsequently have on their surrounding

environment. Exploring the dynamics of

project governance highlights some of these

processes below. Governing the front-end

development stage of a project Some

processes that take place at the front-end

development stage of a project are: • the

early exploration process, in which visionary

individuals and organisations mould the

project concept and test possible receptivity

to it by a number of stakeholders • the inner

governance process, where core sponsors

and developers define rules of the game to

coordinate themselves (in terms of spe

cialisation of roles, risk sharing and

accountability) • the fact-based gathering

and analytical processes, in which financial,

social, technical, and environmental viability

are tested and the project concept refined

274 Buildings, Culture and Environment •

the outer governance process, where efforts

are deployed to rally potential opponents,

obtain rights from government, and

influence regulations for the project to be

economically viable once in operation. All

projects analysed, independent of their

industrial sector and country, had complex

sets of interdependent processes. This is

because projects are dynamic undertakings,

characterised by a non-linear evolution.

They are shaped through analyses and

searches for optimum solutions by the

parties involved and entice much bargaining

in order to capture economic rent and share

risks. Investment decisions and cost

estimates of projects rely on analyses made

early on, at a time when little detailed

engineering work has been initiated. Hence,

decisions and agreements are materialised

on the ground of a future engineering

artefact delivering value, at a certain period

of time, for an estimated number of years

(e.g., a power plant deliv ering x megawatts

of energy by date y for z years). Negotiation

between sponsors, promoters,

governments, financiers, contractors, and

lobby groups to come to a viable project

concept is based on the anticipation of the

value and potential impact (including

externalities) the project will generate.

There are many feedback loops involved

between the players since information is

incomplete and built up gradually;

opportunistic behaviour by parties takes

place; and laws, methods, and standards to

protect the project and give it legitimacy are

inadequately defined and sometimes non-

existent. The example of the Birecik power

project in Turkey reveals the complex front-

end development process of large-scale

projects. It took eleven years between the

moment the energy ministry invited private

entrepre neurs to submit a proposal (to

build, finance, and own the project through

a concession model) and the time

construction started. The Build–Own–

Operate–Transfer (BOOT) model was a new,

radical ideology of the government to enable

the construction of modern infrastructures

by private developers without financial

recourse to the state treasury. There were

high risks involved in developing, financing,

building, and operating the project under

such market schemes, considering the

country’s relative instability, poor economic

development, inadequate institutional

framework, and discontent from

neighbouring Syria and Iraq about changing

the flow of the Euphrates River in order to

produce power in Turkey. More specifically,

two main factors increased the complexity of

negotia tion, illustrating the level of

uncertainty a project can have on local

economy and environment. First, the

reluctance of state officials to agree to

privatisation of investment in infrastructure

projects, especially to Social and

Organisational Understanding of

Stakeholder Interests 275 opening the

power sector to private foreign investment.

Second, the inter national banks’ low

interest in supporting and financing the

project on a non-recourse basis (meaning no

recourse to the state in case of the private

company’s failure to reimburse its financial

obligations). When Turkey’s BOOT

programme was launched in the mid-1980s,

with the Birecik project being one of its

pioneers, the constitution and legal

framework had not been modified to

incorporate such private initiatives. This

issue hit the Birecik project later, in 1993

(eight years after its initial conceptuali

sation), when sponsors tried to obtain

approval for their guarantee and f inancing

scheme. The project aimed to be a stand-

alone, by securing guar anteed purchase of

energy volume and guaranteed price of

electricity from the Turkish Energy Authority

(TEAS). For this market scheme to be viable,

sponsors required to be able to call for

foreign arbitration in the event of default or

other problems. The concession status in

Turkey would not allow such arbitration. In

1994, after intense efforts, a law was passed

to set a code for the development of BOOT

projects, and a specific article within that law

gave energy projects a non-concessionary

status. However, within a year, Turkey’s

constitutional court ruled that it was

unconstitu tional for projects to be

categorised as non-concessionary (the

government did not have the right to change

the law relating to areas of public ownership

under the constitution). Such a change in law

would require a parliamentary vote. The

Birecik project was eventually cleared as an

indi vidual case from the law through

powerful games of influence, and was

approved as a commercial contract in 1995.

Figure 16.1 shows the finan cial deal

structure for the Birecik project. The

intricate web of guarantees put in place

increased the cost of the project. Despite

successful financial closing, the project

caused discontent on the part of the Turkish

popula tion, who were excluded from

negotiations, particularly because of the

high electricity tariff and strong sovereign

guarantee offered by the gov ernment to the

private sponsor. Hence, institutional and

organisational innovation was made at the

expense of end-users’ involvement in final

choices. The Hub Power project in Pakistan,

also among the first BOOT schemes in Asia,

had similar dynamics. The 1292 megawatt

power project initi ated in 1985 could supply

13% of Pakistan’s electrical power

requirements and was viewed as a critical

learning case for the country. In 1990,

halfway through its front-end development

phase, it was reported to be the world’s

largest BOOT project. It was, in fact, the first

private power project struc tured by the

World Bank, which took a significant

participation in the project’s development

and brought innovative financing

mechanisms to support the debt portion,

considering the country’s high-risk profile.

The newly developed innovative financing

and guarantee solutions enticed 276

Buildings, Culture and Environment Prime

Minister Sovereign risk DM 2.3 billion (US

$1.7 billion) 1,292 MW 15 year concession

Development time: 10 years Expected

completion time: 66 months Financing

arranger: Chase Manhattan Bank Signature

of guarantee agreement Default or force

majeure Energy Ministry Political risk Taxes

and tariffs risks B.O.T. company Energy Fund

Subordinated loan for construction financing

15-year export credits 1.0% over LIBOR DM

1,389 bn (64%) Hermes Ducroire OKB Coface

DM 585m DM 299m DM 261m DM 243m

Cost overrun risk Revenue short fall risk from

fluctuating river flows Country risk Equity

contribution by consortium DM 327m

Construction financing risk 7.5 year

commercial loan Syndicate of 44 banks 2.3%

over LIBOR DM 464.4m Fig. 16.1 Financial

arrangements, Birecik power project

Treasury Ensures that TEAS will honour its

commitments Off-take risk TEAS (Turkish

Electricity Generation and Transmission

Corporation) buys electricity at guaranteed

volumes and prices tremendous cooperation

and coordination amongst the World Bank,

the Japan Exim Bank, bilateral export credit

agencies and commercial banks (including

local banks). The design of two financial

instruments by the World Bank (the Private

Sector Energy Development Fund and the

Enhanced Co-financing Facility) was crucial

in making the financing possible. The initial

BOOT projects promoted in industrialised

countries and under taken in the same

period of time faced similar challenges and

complex ity. Despite being developed in

countries with lower risk and more mature

institutional and regulatory frameworks,

they had to manage various f inancial and

political hurdles and build their legitimacy in

order to reach approval for finance, design

and construction. Considering some of the

urban transportation case studies, the

Confederation Bridge in Canada took eight

years of development prior to approval for

execution and the start of detailed design.

The Second Severn Crossing in the UK

required 13 years. Both projects hit various

unforeseen problems and challenges as they

evolved from concept to reality (including

technical, geological, social, environmental,

political, and financial issues). Both had to

deal with a long parliamentary process in

order to secure a bill for their private

undertaking. Like the Birecik and Hub

projects, a broad set of coordinat ing

mechanisms were used in order to enable

the project to move forward. Social and

Organisational Understanding of

Stakeholder Interests 277 Creating

coordination Amongst the recurrent

coordination mechanisms identified in case

studies are: • long-term planning • the

conducting of detailed technical studies •

structured and informal debates and

negotiations between sponsors and

promoters, and with governments and local

groups • the use of market mechanisms

(e.g., competitive bidding for BOOT

contracts) • competition for the offering of

debt portions to financial institutions •

common goal setting, formal contracts, etc.

An important finding from the study was that

a wide variety of co ordination means are

used in each project because a wide variety

of negotiations and transactions occur to

shape a project gradually. Rather than

categorising and benchmarking all types of

modes of co ordination, Thompson’s (1967)

definition of coordination was adapted to

consider how the use of coordinating

mechanisms impacts on projects (Michaud,

2001). As an illustration, raising debt for the

project through the market (e.g., soliciting

international banks for them to ‘buy’ debt in

the project) plays an important shaping role.

In the projects described above, for example,

raising debt according to parameters that

are accept able to core stakeholders took

many years, during which time the projects

were constantly in danger of being shelved.

Numerous adjust ments needed to be made

to make them financially viable (e.g.,

reducing their size, shortening their

construction schedule) and numerous forms

of guarantees provided to lenders, therefore

constraining the degrees of freedom (e.g.,

having specific large-scale international

engineering or con struction firms as key

partners to lower the risk level and attract

more f inanciers). Hence, the raising of debt

influences the shaping of the project’s

technical, institutional, and organisational

attributes. The way in which hearing

processes with communities are organised

offers another illustration of how

coordinating mechanisms impact on the

attributes of a project. Environmental issues,

for example, can be poten tial deal-breakers

throughout a project’s development due to

the economic importance of local trades or

the strong vocal opposition of environmen

278 Buildings, Culture and Environment

talist groups. Often a plethora of

environmental studies must be con ducted

to explore environmental concerns. A

project-specific environ mental assessment

process may need to be organised to

reassure pressure groups who have

successfully challenged the adequacy (or

lack) of prevailing environmental evaluation

methods. These reviews can play a critical

role in the technical design of the project and

change rapports with communities. In the

case of the Confederation Bridge, the project

was stalled by an unforeseen two-year

hiatus just after private developers

presented their proposals, caused by intense

scrutiny of the potential environmental

impacts of the project. A high level of public

concern with the govern ment’s generic

initial environmental evaluation process

sparked the ensuing environmental debates.

Various interest groups felt the evalua tion

matrix was too broad, and the analysis ‘too

academic’. They wanted specific evaluations

of each bridge concept proposed by pre-

qualified developers. Consequently, the

ministry of public works had to appoint an

environmental assessment review panel,

and the project was put in the hands of the

minister of the environment. The panel

eventually recom mended that the project

should not proceed because of impediment

to the movement of ice out of the river strait

and harm to local lobster beds. However, if a

fixed link could be designed in a way that it

did not delay the ice movement process by

more than two days, the project would be

environmentally acceptable. The

government incorporated the panel’s

recommendations into the project selection

criteria and asked developers to review their

proposals. Within the project’s inner

governance organisation, coordination

between sponsors and partners testifies to a

broad spectrum of contractual devices and

tools, ranging from highly informal to highly

formal. For example, the negotiation and

enactment of the core construction contract

is a key co ordinating mechanism in setting

relations between engineering firms,

construction firms, equipment companies

and ultimate clients. In the Second Severn

Crossing project, the winning consortia of

the BOOT process (John Laing and GTM

Entrepose, with their financial advisers Bank

of America and BZW) incorporated a

concession company (SRC plc) to build, own

and operate the crossing. SRC plc became

the client of the project, that is, the owner-

operator. John Laing and GTM Entrepose

also formed an equal joint venture for the

engineering and construction work. Under

this scheme, SRC plc was taking the

commercial risk of the project, including

traffic risk and toll fee operation risk. The

John Laing/GTM Entrepose joint venture

(the contractor) fully assumed the

construction cost and schedule risk under a

lump-sum contract. To manage their deliv

Social and Organisational Understanding of

Stakeholder Interests 279 ery risk, they

opted to reduce the expected schedule by six

months. This goal was achieved by

simultaneously building the central span and

approach viaducts as well as using mastered

technology. Hence, the organ isational and

contractual arrangements influenced the

construction methods and lowered the

degree of technical innovation. Managing

cross-cultural dimensions Every case study

confirmed challenges in integrating players

from various countries and sectors, because

of the mix of international stakeholders and

practices involved. Figure 16.2 shows the

organisational structure for the Ankara

Metro, for example, at both the front-end

development and engineering–

procurement–construction stages. There

were Turkish stake holders (the Treasury, the

state planning organisation and the

municipal ity of Ankara); the engineering and

construction firms (Gama and Guris);

Canadian players (the engineering firm SCN-

Lavalin, the export develop ment

corporation of Canada and the Royal Bank);

and British players (the export development

corporation of the UK and West Merchant

Bank). Not only were the cognitive models

and ways of working of these various players

different, the objectives they pursued

varied. Although they aimed toward a

common goal (i.e., to provide Ankara with a

heavy-rail transit system) stakeholders

wanted to meet individual objectives. For

example, the engineering firm SNC-Lavalin,

the early promoter–developer of the

project, wanted to access the East

European/Asian projects market to develop

an international reputation in mass transit

projects. The State Planning Organisation

wanted to meet the Turkish Prime Minister’s

objective of implementing BOOT projects in

Turkey and therefore to be recognised

internationally in succeeding in such an

endeavour. The Turkish engineering and

construction firms Gama and Guris seemed

to mainly want to fill their order books. The

aim for a common goal was certainly the

most determinant co ordination mechanism

that rallied the various stakeholders, notwith

standing their culture. Despite growing

difficulties to get the project f inanced and

approved (the Gulf war declared in the

spring of 1991, the bankruptcy of Lavalin and

the subsequent takeover by SNC, changes in

Turkish government at the national and local

levels), the commitment of core members of

the coalition to deliver the project never

failed. Specialisation of roles by areas of

competence was also a core means of

managing cross-cultural issues: project

management, political 280 Buildings, Culture

and Environment Front-end development

stage Treasury SPO Municipality of Greater

Ankara Proposed Ankara Metro Company

(under BOT formula) EGO Canadian

members Canadian-Turkish coalition SNC-

Lavalin Bombardier / UTDC Financiers/deal-

makers Bankers Trust EDC ECGD

Financial/agents West Merchant Bank Royal

Bank SPO: State Planning Authority of Turkey

EGO: Mass Transit Authority of Greater

Ankara Metropolitan Area EDC: Export

Development Corporation of Canada ECGD:

Export Development Corporation of the U.K.

Turkish members Gama Endustri Guris Insaat

Engineering–procurement–construction

stage EGO Louis Berger Yapi Teknik Teksan

Sial US $574m Construction Contract Ankara

Metro Consortium JTDC / Gama Guris C

$20m Kizilay Station Foreign member UTDC

Consortium Local member Gama / Guris

joint venture Guris Insaat US $97.7m US

$97.7m US $264m US $11.6m US $75.4m US

$114m Gama Endustri Bombardier Inc./

UTDC Systems Division SNC-Lavalin Inc.

Westinghouse Brake Coppee GEC Alsthom

Traction GEC Alsthom Transmission NEI

control systems Thorn EMI NEI Control

Systems Balfour Beatty Eng. Brecknell Willis

US $13m Fig. 16.2 Organisational models:

Ankara metro project Social and

Organisational Understanding of

Stakeholder Interests 281 negotiation, local

regulation and permits acquisition,

construction competencies, etc. Interaction

between key stakeholders was mainly by

direct means: working meetings, exchange

of letters of intent, and by creating early on

a joint project team sitting in the same office.

Another important aspect was time. From

the moment the first proposal was made in

1987 to the time the financial agreement

was concluded in 1992, mutual recognition

of skills and trust was developed. Hence, the

long period of time characterising the front-

end shaping of projects can be essential to

deal with cross-cultural ‘co-habitation’. In all

the projects analysed, cross-cultural issues

were particularly sensi tive when negotiating

the division of rights and obligations

between project developers and state or

local governments. More than a cross

cultural issue, those negotiations revealed a

cognitive challenge: diver gence in the belief

of the private sector delivering and

operating large-scale projects in an optimal

fashion, or in the priority of the project for

attain ing broader socio-economic or

political goals. Many features of the insti

tutional framework were directly impacted

by negotiations: the constitution and

constitutional traditions, the local legal and

commercial practices, the local regulatory

bodies’ commitment ability, etc. Various

real-time devices and incentives were

stakeholders to compensate for ill-defined

institutional foundations for their projects,

including stand-by financing, guarantees,

project specific regulations, partnerships

with opponents, and the setting of new voice

mechanisms to manage rights of local

communities including new forms of hearing

processes. In summary, large-scale,

international projects result from a complex

set of interactions between entrepreneurs

and other stakeholders who use pre vailing

institutions to promote and protect their

project and who try to change those

institutions incrementally or significantly

when needed. Crafting the innovation

process Projects may stimulate broad

institutional change to a region or country by

setting new project delivery models that

establish paths for the delivery of the next

projects. Scott (1995) well illustrates the

process of institutionalisation, empirically

observed in the case studies. Projects forcing

major redesigns to the institutional

framework come at the end of an

‘institutional cycle’ (a concept similar to

business cycles see Freeman and Perez,

1988). They are ‘institutional breaker

projects’ 282 Buildings, Culture and

Environment setting new trajectories

(Michaud, 2001). They emerge from

entrepre neurial actions by public and

private agents who seek new models and

policies to attain broader socio-economic,

industrial or organisational goals. From the

interaction of sponsors, government

officials, regulators, f inanciers, and other

actors, these projects set new models to

govern rights and obligations between public

and private players. New institutional

arrangements resulting from institutional

breaker projects may establish a dominant

design by shaping the next series of projects.

The La Grande hydroelectric power project

in Northern Quebec, Canada is typical of a

project shaped by its predecessors, or a

‘commodi tised’ project (one done as part of

a series). Although its technical design was

somewhat different from the previous

hydroelectric projects done in that region, it

inherited the exhaustive institutional and

economic framework (the James Bay

agreement) negotiated with local

populations for previous projects. Dominant

designs from institutional breaker projects

may extend over several decades, such as

the private power monopoly model in the

United States in the twentieth century,

which guided the modelling of many projects

(Hughes, 1983). Managing trade-offs in

innovation Large-scale projects provide

information on the trade-offs made between

institutional, technical, and organisational

innovation. In several projects analysed,

institutional and organisational innovation

was made at the expense of innovation in

technical design. New public–private partner

ship arrangements especially create

pressure to shorten project develop ment

cycles because of the private financing

scheme and resulting higher level of risk for

promoters and financiers. This can have

perverse effects on technical innovation,

pushing for the use of simple and mastered

tech nologies to reduce project time and

development cost, and quicken the project’s

legitimacy process up front with financiers,

government élites, and regulators. The

Dartford Crossing in the UK is an illustration

of this phenomenon. The project team

interviewed at John Laing and GTM

Entrepose con f irmed that they decided to

take no unnecessary risks because of the

finan cial obligations negotiated in the BOOT

contract. Managing technical risks led to the

construction methods driving the detailed

design (instead of the design driving the

construction methods), in order to respect

strict Social and Organisational

Understanding of Stakeholder Interests 283

delays tied to the financing clauses specified

in the concession contract. Such projects

tend to be less innovative in terms of design.

However, the pressures built into contract

triggered incremental innovation in con

struction and project management methods.

This allows the sponsors to increase the

likelihood of operating the infrastructure at

the earliest possible date and/or to make the

largest profit on construction (depend ing on

where their financial incentives and the risks

they support lie). Addressing the

sustainability of various approaches The

research identified two broad types of

cognitive framework for the transition to

new forms of public–private ventures. They

are tentatively named stretching the market

and true public–private partnerships. It was

recognised that any specific project does not

necessarily fall perfectly in either one or the

other description. ‘Stretching the market’ is

an ideology that uses market theory to

modify the institutional framework

significantly. It tends to push complex, non

linear projects to their limit. Changes

promoted by various agencies such as the

International Finance Corporation or the

International Monetary Fund are based on a

strong ideological belief that private firms,

disciplined by competitive market forces,

can deliver large-scale projects with superior

efficiency than state-owned companies and

governmental agencies. The creation of

competitive market forces is supported by

innovation in technology, financial markets,

and economic regulation. For example,

competitive market forces are supported by

the unbundling of activities in which

economies of scale are believed to have less

importance (e.g., the power generation

sector), and by eliminating regula tory

barriers to entry. In such models, there is a

strong belief in the min imisation of

monopoly forces, reduction of government

guarantees, and the reliance on non-

recourse project financing (projects financed

on their own through revenues from

operation rather than relying on government

guarantees). As shown in Table 16.2, analysis

suggests that the concept of stretching the

market presents higher risks for projects.2

Projects following that ideology often result

in much incoherence in institutional designs,

for example: 2Typologies of ‘stretching the

market’ and ‘true public–private

partnership’ were assigned a posteriori to

projects based on the research team’s

judgement. Evaluation of risk is a measure

built from quantitative and qualitative

observations. • transition from a public to a

private model without the exercise of real

ownership rights by private sponsors (e.g.,

some Indonesian projects analysed in IMEC

where the public–private contractual clauses

were not respected by sovereigns) •

contract-based regulation without

appropriate legal foundations (e.g. BOOT

contracts in Turkey were illegal according to

the constitutional provisions and each of

them is still today a case for major debate) •

aprivate sponsor bearing high risks but being

strongly limited in terms of profits, therefore

supporting most of the downsides and little

of the upsides (e.g. some of the projects

undertaken under the Private Finance

Initiative in the UK) • public–private

partnerships without a legitimate public

partner (e.g., the MUSE highway project in

France was not supported and protected at

the right level of government). Such models

require significant changes to prevailing

institutions. If any of their key assumptions

and requirements is not fulfilled or if some

strong beliefs in competition fade, projects

are at risk. This may occur as a result of new

political elections, change of leaders,

regulation not becom ing adapted as

promised, user tariffs not allowed to be

increased to make the project economically

viable, or changes from monopoly to market

dynamics not being managed properly. 284

Buildings, Culture and Environment Table

16.2 Relation between public–private

partnerships models and project risks

Degree of project risk Number of % Low risk

Medium risk High risk projects No transition

14 11 3 28 46.7 to market model Stretching

3 7 15 25 41.7 the market True public/ 1 2 4

7 11.7 private partnership Number of 18 20

22 60 Total projects % 30.0 33.3 36.7 100.0

Chi-Square Value Degrees of Significant

17.22394 freedom 4 .00175 Transition

model to public–private partnership Social

and Organisational Understanding of

Stakeholder Interests 285 By contrast,

designing true public–private partnerships

follows a different ideology. They are

structures that blend private initiative with

public accountability, rather than unduly

pushing all complex problems onto the

market (Brooks et al., 1984). Economic

agents from both the public and private

domains realise that there is an opportunity

for a positive-sum game. Partnerships are

based on the design of state-chartered

private com panies who are given

concessions and whose charters stipulate

fair pricing structures and price escalation,

standards of construction and mainte nance,

etc., in return for innovation and for some

measures of regional socio-economic

development and environmental protection.

Uncertainty in future revenues is taken into

account: government provides various forms

of support, such as land grants (e.g., to

capture a portion of land exploitation

revenues to manage economic risks); the

guarantee of serving a large base of paying

customers by means of monopoly rights;

subsidies to compensate for imposition of

low tariff escalation; guaranteed prices or

revenues; aid-in-kind; or other mechanisms

and means to compensate for risks and costs

borne by private developers. These projects

look to the long-term viability, anticipating

that they will lock in solutions for some times

up to 100 years, and therefore will have

consequences for tech nologies, society and

other dependencies. They emphasise front-

end analysis efforts in order to analyse

several options for the project and they

report lock-ins to the latest stage possible.

The Confederation Bridge in Canada is

among the best public–private part nerships

investigated in the IMEC Research

programme. Despite critiques by various

stakeholder groups, it represented a fair

alliance between the public and private

sectors rather than client–supplier

relationship. Front-end analysis embedded

social and environmental impact analysis

and mastered public hearing processes.

Decisions were made according to criteria

formally embodied in negotiation and

agreement contracts. A form of limited part

nership was created, articulating the rights

and responsibilities of parties and specifying

the management of externalities and spill-

over effects. Implications for the delivery of

environmentally progressive buildings From

the perspective of some key findings in

studying large-scale engi neering projects,

what are the key implications for the design

of future buildings? There are at least two

lessons. First, the research shows that for

any project, institutions are incomplete and

need to be transformed to some 286

Buildings, Culture and Environment degree

in order to manage projects’ risk and

uncertainty and foster inno vation. In order

to be developed in an innovative fashion and

set an envi ronment for future capturing of

value, projects must force changes onto

institutions and regulations: this serves to

unfreeze prevailing practices, rules, laws,

and perceptions, thereby allowing

innovation and adaptation into new

environments. Both institutional

determinism and adherence to prevailing

rules and standards (Parsons, 1960) and

evolutionary mechanisms to change the

prevailing institutions where needed (Nelson

and Winter, 1982) act together to support

the means and ends of project development.

The diffusion and application of progressive

building approaches there fore require

changes in the particular institutional

environment (local and/or international)

that frames a project, and the ways in which

to manage related risks. This serves to

directly shape the project’s gover nance

model – that is, the coordination devices

used by sponsors and stakeholders to

manage joint project objectives and

overcome hurdles in the process of

innovation. Governance models are often

emulated from institutional arrangements

developed for other projects in various coun

tries and sectors (e.g., copy of BOOT model

agreements from other proj ects and of their

legal contractual arrangements). If viable,

they can enable the establishment of a new

path, or diffusion process for other projects

to come. Transforming institutions to

achieve higher project performance is pos

sible. However, a limited number of

stakeholders and firms have the

competencies and the resources to play the

‘institutional shaping game’. Major

transformation of the culture of institutions

is complex and time consuming; it requires a

deep understanding of the many social,

cultural, historical and legislative features of

a country, region, and sector, as well as

careful, locally adapted strategies. Creating

the right coalition of stake holders is key to

success, and the quality of parties and of the

coordina tion mechanisms used to protect

and promote the project directly affect its

success. Second, the research indicates that

short-cuts to the front-end develop ment

process are hard to achieve and likely to be

non-viable in the long term. Social groups

not involved effectively, government

officials and reg ulators assessing after the

event that private developers have obtained

too much value through contracts

negotiated, and others will react during

project execution or early operation to try to

change the course of things. Unbundling

agreements and renegotiating division of

rights and obliga tions is expensive and risky.

Projects are better off accommodating local

Social and Organisational Understanding of

Stakeholder Interests 287 social,

environmental, economic and cultural issues

by structuring the right voice mechanisms

and integrating these inputs into the

project’s strategy and governance model.

While the IMEC research focused on large-

scale projects, it provides lessons for

projects of smaller scale – especially those

where the procure ment rules appear rigid.

The answer may lie in the appropriate

manage ment of trade-offs between

institutional, organisational, and technical

innovation in order to manage degrees of

freedom. Engineering firms, con struction

firms and suppliers must strategically think

(and behave) as much as possible as

promoters and developers of projects and

find the appropriate interstice(s) to

innovate. For this, detailed planning and in

depth strategy development at the front-end

development of projects are crucial.

References Brooks, H., Liebman, L. and

Schelling, C.S. (1984) Public–Private

Partnership: New Opportunities for Meeting

Social Needs. Ballinger Publishing Company,

Cambridge MA. Freeman, C. and Perez, C.

(1988) Structural crises of adjustment:

business cycles and investment behaviour.

In: Technical Change and Economic Theory

(eds G. Dosi, C. Freeman, R. Nelson, G.

Silverberg, and L. Soete). Frances Pinter,

London. Hughes, T.P. (1983) Networks of

Power: Electrification in Western Society,

1880–1930. Johns Hopkins University Press,

Baltimore. Michaud, P. (2001) Institutional

innovation and the selection of complex

engineering projects: a dual relation. DPhil

thesis, University of Sussex. Miller, R. and

Lessard, D.R. (2000) The Strategic

Management of Large Engineer ing Projects.

Massachusetts Institute of Technology,

Cambridge, MA. Nelson, R.R. and Winter,

S.G. (1982) An Evolutionary Theory of

Economic Change. Harvard University Press,

Cambridge, MA. Parsons, T. (1960) Structure

and Process in Modern Societies. The Free

Press, Glencoe. Scott, W.R. (1995)

Institutions and Organizations. Sage

Publications, Thousand Oaks, CA. Thompson,

J.D. (1967) Organizations in Action. McGraw-

Hill, New York. 17 Contemporary Chinese

Architectural and Planning Practice –

Aspirations and Challenges Joe Carter ‘China

has no precedents in its past for buildings or

spaces in higher density urban areas;

courtyard cities are one-storey high. The

farmer and the Emperor both lived in the

same house-type; only the size and

decoration were different. Marco Polo said

Beijing was the largest village he ever saw.

The urban planning may be brilliant, but

there is an absence of urban design.’1 Qi Xin

‘[I]f we want to preserve our national

characteristics, we must first make sure they

can preserve us. Distinctive things are not

necessarily good, so why must they be

preserved? Why keep a carbuncle just

because it’s Chinese?’2 Lu Xun (1881–1936)

Chinese author and social critic Introduction

By embarking on a rapid path of

modernisation of its built environment,

China is encountering problems at

architectural, technical, environ 1Qi Xin,

conversation, 21 March 2002. 2Lu Xun,

quoted by Ruth Weiss, Lu Xun, A Chinese

Writer for All Times, New World Press, China,

1985, p. 85. Contemporary Chinese

Architectural and Planning Practice 289 a b

Fig. 17.1 View of old Beijing from Drum

Tower. The Bell Tower (a) and old courtyard

housing submerged in trees (b). A new line of

high-rise construction begins at the edge of

the old city in 17.1a mental, and social levels.

These challenges are particularly poignant

for Chinese architects and planners. These

professionals are attempting to reconcile

and apply ideas imported from the West

along with China’s vast heritage. As a

Canadian architect resident for 17 years in

Beijing and Tianjin, it has been a privilege

and a challenge to learn from traditional and

current Chinese practice, and to participate

in China’s search. 290 Buildings, Culture and

Environment Fig. 17.2 View of Shanghai,

Pudong District, from Jin Mao Tower The

pace of development in China is so intense it

presents both enormous potential and

threat. Most of urban China has been built

since the mid 1970s, at a rate of over 150

million m2 per year, often in huge single proj

ects. This rate of urban expansion is

unprecedented and is contributing to serious

physical and cultural environmental

degradation. Along with increased water and

air pollution, diminishing water resources,

and deser tification, the physical remnants of

China’s urban cultural wealth are col lapsing

from neglect or being brushed aside. A

World Bank report in 2001 praised China for

handling severe environmental problems

since the early 1990s but warned that

spending on conservation was being

outstripped by economic growth, and urged

a more active approach. Although China’s

urban population is still relatively poor, a

rising stan dard of living and the

accompanying rising expectations of

material pros perity are challenging the

sustainability of development. Will

increasing prosperity lead China to embrace

the same consumer-driven and un

sustainable growth patterns of wealthier

countries or to benefit from their mistakes?

An even more disturbing threat to

sustainability is the emergence of

corruption, economic crime, opportunism

and a renewed disparity between rich and

poor. Contemporary Chinese Architectural

and Planning Practice 291 Chinese children

now are eagerly learning English, science,

mathematics, and engineering to enter a

global society. About half of China’s urban

adults own mobile phones, and the

information highway has been adopted

wholeheartedly. Among urban families, 10%

now own a private car and Chinese cities are

beginning to choke on this new traffic where

once there were mainly bicycles. China is

proving to be outward looking and eager to

adopt Western science and technologies.

These are often regarded as panaceas for all

social and economic development ills and

are not neces sarily subjected to critical

examination for their appropriateness or

economic, social or environmental

implications. The nature and still rel atively

low level of education and management

experience inhibit the proper application of

Western ideas and methods. While many are

aware of the opportunities to leap over the

older technologies or planning errors and

paradigms of ‘developed’ countries; this

happens by legal necessity or economic

opportunity more than it does by considered

choice. Currently, the opportunity exists to

build in order to improve living stan dards,

accommodate large migrations into the

cities, and allow for further industrialisation.

As the cities absorb tremendous population

pressure and demand for shelter, existing

urban fabric and traditional ways of life are

under threat. Thus the questions arise:

which solutions to apply? as well as what

should be retained? and what should be

discarded? With the rapid supply of high

volumes of the built environment, little time

exists to learn from the lessons of the past,

or from other countries, and weave them

into present practice. Moving a culture

forward, when the shadow of the past on the

present is so large, can make it more a

burden than a rich source from which to

borrow. In 1949, Towns and Buildings of the

World, by Rasmussen, rated Beijing as pre-

eminent. Of ‘Peking, the capital of old China!’

he asks, ‘Has there ever been a more

majestic and illuminative example of

sustained town-planning?’ The past can be a

hard act to follow. In terms of a

contemporary national architectural style,

China is still struggling to progress beyond

the ten monumental structures built to cel

ebrate its 10th anniversary in 1959, including

the Great Hall of the People, the History

Museum, the Beijing Railway Station, and

the National Art Gallery. These structures

are dignified and have some Chinese motifs,

but they are still just preliminary steps

toward reinterpreting China’s archi tectural

and urban design heritage in modern terms.

The new Beijing West Railway Station,

designed in the early 1990s, tries harder than

its 1950s predecessor to be a modern

prototype, but lacks the dignity of the origi

nal station. 292 Buildings, Culture and

Environment Fig. 17.3 Modern office

building in Beijing with a Chinese pavilion

and roof incorpo rated into the whole façade

Fig. 17.4 Modern office build ing in Beijing

with a Chinese pavilion in the upper area of

the facade and another pavilion as an

entrance Contemporary Chinese

Architectural and Planning Practice 293

Liang Si Cheng, the founder of China’s

premier school of architecture at Qinghua

University said, more than 50 years ago:

‘Now, with the coming of reinforced

concrete and steel framing, Chinese

architecture faces a grave situation. Indeed

there is a basic sim ilarity between the

ancient Chinese and the ultramodern. But

can they be combined? Can the traditional

Chinese structural system find a new

expression in these materials? Possibly, but

it must not be the blind imitation of

“periods”. Something new must come out of

it, or Chinese architecture will become

extinct.’3 The real estate boom that started

in the early 1990s saw the construction of

many office and apartment towers that had

either foreign designers, some of whom have

never been to China, or local designers

experiment ing with and emulating Western

design. For foreign-invested, high standard

office and residential buildings, the design is

usually a wholesale import from the West.

Local architects also made attempts to make

some new buildings ‘Chinese’. The

references to historical styles, often quite

literal, look uncomfortable on modern

building types. Just as uncomfort able is the

awkward imitation of Western detail. The

resulting built envi ronment at best lacks an

architectural and urban design language and

at worse is deemed chaotic and even

‘barbaric’.4 This gives renewed urgency to

answer the question ‘What is modern and

Chinese?’ Every developer’s design brief still

asks for ‘modern with Chinese

characteristics’, but its realisation is elusive.

The result is fragmentation, a clash of old–

new, East–West, and thoughtful-immature

design. When the boom started, the mayor

of Beijing attempted to protect the city from

over-Westernisation. To counter the

concerns that too many new tall structures

with flat roofs were being built in Beijing, he

insisted that all new towers wear a Chinese

pavilion roof ‘hat’ and parapets with glazed

Chinese tiles to create a more Chinese-

looking skyline. Although this aspiration was

admirable, the result was unsatisfactory.

Locals recognise 3Liang Si Cheng, A Pictorial

History of Chinese Architecture, MIT Press,

1984, p. 3. Chinese classical architecture has

a post-and-beam wood frame structure

connected with complex nail-less joinery.

This frame structure, while almost obscured

by walls of brick and roofs of clay tile, is

independent of them, and, in this sense,

contains a basic similarity to frame

structures with a curtain wall. 4Phyllis

Lambert, head of the Canadian Centre for

Architecture, used the term ‘barbaric’ to

describe China’s modern urban landscape in

a lecture at Beijing University, 12 November

2001. Qi Xin, a 42 year old Chinese architect,

educated in Beijing and France has described

the character of China’s modern architecture

as ‘chaotic’. 294 Buildings, Culture and

Environment Fig. 17.5 Beijing streetscape

with local adaptations of modern and

classical Western architec tural forms the

artificiality of such roofs and refer to the strip

of tiles applied to the parapet as the

‘watermelon rind’. These issues have been

the focus of soul-searching by all of China’s

leading planners and architects. Their

aspirations are entwined with China’s desire

to modernise and become a contributor to

the modern world after so many centuries of

isolation. However, challenges exist at many

levels: • reconciliation of economic

development with social wellbeing and

cultural continuity • differentiation between

technological and cultural needs • aclash

between former revolutionary values of self-

sacrifice and aus terity and new policies

promoting individual acquisition of wealth •

architectural and planning heritage

embodied in the old building fabric that is

dilapidated • China’s urban development

model now has much higher densities than

before and consequently the old fabric and

buildings are threatened with replacement

Contemporary Chinese Architectural and

Planning Practice 295 • new construction

lacks craft; old construction was rich in

symbol carrying craft and detail • current

patterns of development are large-scale,

centrally designed and organised in contrast

to the traditional city composed of single

(extended) family houses built using

traditional patterns • old cities cannot

sustain the onslaught of the private car. The

transition to higher density cities In the

West, there is debate about whether

sustainable city form is compact high-

density, decentralised low-density, or

decentralised concentration. While ‘it is not

possible to state categorically that one

particular theoretical urban structure is

more sustainable than another’ (Moughtin,

1996), the model for urban China today is

based upon compact and high-density cities.

The average gross plot ratio5 in new

residential areas of Chinese cities is a

minimum of 1.0 and often higher. The

traditional old city in residential areas had a

plot ratio closer to 0.3. The gross average

population density of the built-up part of a

Chinese city, including near suburbs, is about

10000 people/km2 (100 people/ hectare).

The argument for the compact high-density

city is that density of build ings and people

will optimise exchange, access to services,

and opportun ities for mutual support.

Higher density should enable a more

equitable and accessible distribution of

community resources with walking access to

shopping, schools, services, and more

efficient public transportation. The density

should not be so high, however, that the

system becomes paralysed and suffocating,

nor so low that it needs unsustainable infra

structure to support it. No definitive

numbers exist for ‘optimum’ sus tainable

urban densities, so further research is

needed to inform policy and practical levels.

Indeed, the recent and emerging

experiences of urban density in China would

also inform such research. If the compact

high density city is a valid sustainable urban

form, then, in this aspect at least, Chinese

cities have the potential to be more

sustainable than most North American cities.

5Plot ratio or floor area ratio (FAR) is the

number of square metres of building on a

given site compared to the size of the site.

For example, a ten-storey building with

1000m2/floor has a building area of

10000m2. If this building were placed on a 1

hectare site (10000m2), the plot ratio would

be 10000m2 of building/10000m2 of land, or

1.0. 296 Buildings, Culture and Environment

However, the reason for creating compact

high-density cities has been limited means

rather than a conscious policy of

sustainability. Chinese pragmatism,

moderation, a frugality learned from

poverty, and limited land resources result in

new construction with a relatively high

urban building density and a Spartan

lifestyle. Most urban Chinese people cycle or

take a bus to work, wear long underwear in

winter, turn off lights when they leave a

room, live in small spaces, and are sparing in

their use of water and cooking gas. With

rising wealth, the advantages of optimum

density city construction and energy-saving

lifestyles can erode unless there is increased

environmental awareness and education.

Gains in build ing envelope performance, for

example, may be outpaced by rising stand

ards of comfort. If the socially acceptable

and affordable limits of comfort increase,

then the gains in building performance will

be countered by expectations of higher

indoor temperatures in the winter, etc.

China cannot afford the West’s sprawling

very low-density suburbs resulting in

expensive infrastructure. While

sustainability was not a conscious goal, the

results nonetheless achieve sustainable

characteristics. Chinese architects and

planners can play a decisive role to help

retain the current unconscious eco-habits

and sustainable development patterns by

making them conscious. One available

instrument is China’s Agenda 21 Programme.

Its ‘constitution’ is the Government White

Paper on China’s Population Environment

and Development in the 21st Century. This

clear and informative 1994 document is a

blueprint for coordinated action on many

fronts. Among other things, the Agenda,

especially Chapter 10, ‘The Development of

Sustainable Human Settlements’, could

become part of the curriculum for

architectural and planning education, and a

guide for foreigners interested in any aspect

of sustainable urban development in China

(see also

www.townsnet.com/agenda2.htm). While

favourable arguments can be made for the

new higher density Chinese city, from the

point of view of architects and planners

some major problems exist. First, there is a

lack of a satisfactory urban design lan guage

for this new level of density. New densities

far exceed former den sities and therefore

threaten the existing traditional city. Second,

the urban development process is ‘top-

down’, and delivered at mega-scale, leaving

little room for diversity and participation.

Third, globalisation, ini tially at least, seems

to be a vehicle for the transmission of a

consumer driven development paradigm

that not only threatens sustainability but

obscures the possibility that China’s vast

philosophical and cultural reser voir might

provide clues to valuable alternatives.

Finally, the ability of the high-density city to

sustain social and cultural needs over time

needs to be validated. Contemporary

Chinese Architectural and Planning Practice

297 Urban design for high density The bulk

of the compact Chinese city is composed of

housing, and its form is defined by a number

of factors: • limited budget (about

US$120/m2 for construction) • scarce land •

high dependency on apartments to meet

density demands; the house typology is

almost non-existent in modern urban China

• amodest apartment unit size • an ancient

tradition of southern exposure for all

buildings • awillingness to climb six floors

without a lift (elevator) • reliance on natural

cross-ventilation for summer comfort.

(There are no double-loaded corridor

apartment layouts in China. Normally there

are two units per floor at each stair landing.)

• structural requirements for earthquake-

prone areas • awork force using simple tools

and methods. Within the above criteria and

constraints, until recently most housing in

China was six-storey walk-up apartments

with plot ratios between 1.0 and 2.0. Even at

the edge of many cities, six-storey residential

buildings are typically built across the road

from farmers’ fields. More recently the plot

ratios, within the property lines of a 10 to 30

hectare housing estate, have risen to 2.5–

3.0. The population density on these sites

can exceed 1000 people/hectare.6 When the

plot ratio in a residential area goes over 1.0,

the house type disappears and the

apartment type predominates. Most mid-

and high-rise housing in China is now free-

market housing, not social housing. People

are willing to buy high-rise housing because

it is affordable and provides more interior

and outdoor (communal) space. These

building densities are not perceived as

overcrowded, because people have usually

moved out of even more crowded conditions

(as low as 4m2/person) in older parts of the

city to a new apartment with 15

20m2/person. 6We can compare these two

ratios to determine a third ratio, building

space per person. In the above example,

typical of new urban China, the ratio is an

average of 20m2 of building per person. 298

Buildings, Culture and Environment Fig. 17.6

Housing in a northern suburb of Beijing with

a density (plot ratio) of about 3.0 If the

current densities for the new Chinese

compact high-density city are sustainable,

then the village-like one-storey, old

courtyard city with its plot ratio of around

0.3 will not be preserved unless it is

recognised for its high cultural value. An

alternative urban multi-family dwelling type

with three-storey apartment blocks forming

small courtyards and a plot ratio of

approximately 1.0 was created by Professor

Wu Liang Yong at Qinghua University,

Beijing, in the late 1980s. Despite being

awarded a UNESCO Habitat prize, much

publicity, and thousands of visitors, the

model has not been replicated. This is mainly

because land values have risen and the

project’s density is now too low to be

affordable. It also appears to matter little to

the average family to live in a quintessential

Chinese courtyard house. The six-storey,

higher density slabs are per ceived by

Chinese consumers to be better because

they provide more light and air to all the

units. There is also a lack of vocabulary for

public space, as its use was not encouraged

in China’s old cities. Old cities were mostly

administrative centres, not centres of trade.

Consequently, there is a lack of a semi

private, and semi-public space in the spatial

hierarchy. In addition, there are no

precedents for modern building types such

as office towers, airports and railway

stations. Only when other values are strong

enough to intervene at policy and

implementation levels, such as the value of

heritage preservation, will Contemporary

Chinese Architectural and Planning Practice

299 such districts will be preserved. If the

policy of higher density is viable, then lower

density areas have to be preserved and

sustained by internal cross-subsidy from

areas of higher density. However, this often

comes with the cost of gentrification.

Another design challenge is China’s current

scale and pace of develop ment. A 10-

hectare site, in urban China, with a plot ratio

of 2.0 has 200000m2 of buildings and is not

considered a large-scale development.

Christopher Alexander’s (1987) idea of

healthy, piecemeal, organic growth is in

development sizes with an upper limit of

about 10000m2; only one twentieth of

China’s smaller scale developments. A

typical New York city block for example is

about 80 ¥ 270m, just over two hectares,

one-fifth the size of China’s smallest. For

security reasons and to obtain more

protected green space for resi dents, these

10-hectare and upwards housing projects

tend to be ‘gated communities’ with no

through streets. This tends to contradict the

ration ale for higher density, namely, to

improve accessibility. The rich grain of small-

scale urban street blocks advocated by

Jacobs and Alexander is not found in New

China. Chinese planners would be

challenged by Cliff Moughtin, Emeritus

Professor of Planning at the University of

Nottingham, who says: ‘The larger and more

homogeneous the street block the greater

will be its power to destroy the social,

economic, and physical networks of the city.

The large-scale single-use, single-ownership

street block is the instrument most

influential in the decline of the city: its effect

together with that of its partner the

motorcar are among the real causes of the

death of the great city.’ Moughtin, 1996, p.

138 Along with city size, and population and

building densities, street block size is

another area of useful international

comparative research. If the higher-density

compact city is an aspect of sustainable

urban devel opment for China, then the

recent appearance of single-family home,

suburban developments in larger Chinese

cities is a threat to sustainabil ity. This niche

market has attracted foreign developers,

with some promoting the use of wood frame

structures for this housing. Flammable wood

construction cannot be used in China’s

higher density cities; its use must be

confined to the ‘unsustainable’ suburbs.

Although traditional Chinese structures were

all timber frame, this was only possible in a

300 Buildings, Culture and Environment

lower-density one-storey traditional city.

Timber has also become a scarce resource in

China. Its harvesting is a major contributor to

flooding and soil erosion. Importing timber

violates the sustainability principle of using

local materials. Fortunately, a perception

that repairs and alterations would be too

expensive inhibits Chinese developers from

pursuing the use of timber. The urban

development process The current urban

Chinese development model allocates large

tracts of land to large development

companies, with centralised organisation,

using one design company to provide a few

identical unit plans using national

standardised construction details. The

tremendous volume and speed of urban

construction in China, achieved in such a

short time, has been accomplished through

a military approach with rules, regulations,

and armies of workers (mostly farmers)

organised like soldiers, living in barracks on

the site. While this method achieves the

desired speed and volume of building

construction, its centralisation discourages

diversity. Top-down organised ‘mass

housing’, built according to national

standards works, against the use of regional

pattern languages. There is also a tendency

toward the ‘majesty’ of monumental

symmetrical facades, and impressive wide

streets cleared of outdoor markets, sidewalk

pedlars, and small private shops. This hurts

street life and reduces the stock of valuable,

older, low rent, ‘incubator’ buildings7 so

useful to China’s budding entrepreneurs.

The overall result can be a numbing

homogeneity, and a rough coarsen ing of the

urban grain. The process is understandably

simple given limited management resources,

a shortage of design professionals and an

author itarian social condition. Property

management, no longer the responsibility of

the government, is undertaken by a

subsidiary company of the developer. Early

attempts are being made to organise

residents’ management committees but two

diffi culties are encountered: the vast size of

housing developments contain ing 2–3000

families, and passive habits acquired during

five decades of state care, which inhibit the

realisation of self-management. 7Jane

Jacobs, the author of Death and Life of Great

American Cities, refers to a city’s stock of

older, low-rent buildings as essential for

economic development, as places where

budding entrepreneurs can experiment, with

lower financial risk, to establish new

businesses. Contemporary Chinese

Architectural and Planning Practice 301

Implementing a more decentralised process

will take time. Although China has gained

valuable experience implementing national

policies, such as the Housing Reform Policy

(allowing local government to inter pret

guidelines according to local conditions), the

size of the cities is still so large and the

authoritarian mode so prevalent that urban

development is still controlled from toward

the centre. Valuable international

precedents for alternative urban

development models exist for China to look

at. The St Lawrence Market Neighbour hood

in Toronto, for example, is a multi-tenure,

multi-developer, multi architect housing

estate (with some other uses mixed in) built

around a common municipal plan. Only the

overall development guidelines were

centralised. This project has a scale and

density consonant with China’s needs, but

with greater complexity and diversity of

organisation and build ing design. Another is

the Berlin IBA (Internationale

Bauaustellung). It involves public funds,

public interest, private development, and

some of the most prominent architects in

the world, all used for urban renewal and

rehabilitation in an open process.

Globalisation The end of China’s long,

dynastic cycle of civilisation and its search for

modern identity both coincide with

accelerating globalisation. The Chinese

dynastic cycle of civilisation, from its great

Tang, Song heights, has just finished its

decline; a decline that concluded with 100

years of colonisation and civil war. New

China is barely 50 years old. The memory,

even the shame, of the decline, and the

glamour of new ‘Western’ wealth, obscure

and inhibit recognition of China’s potential

contribution to the philosophical

underpinnings of our collective

development. As long as the current

Western, consumer-driven development

paradigm model stands and China ‘buys’ into

it, in the near future, at least, the possibility

that China could contribute to alternative

scenarios will not be recognised by others, or

even by itself. The Harvard University

sinologist, John Fairbank (1992), calls China a

latecomer to modernity, especially since the

Open Door Policy of 1978, and asks whether

it has emerged from isolation just in time to

participate in the demise of the world or,

with millennia of survival experience, to help

rescue it. James Yen, a Chinese pioneer in

rural development in the 1930s, suggests the

latter possibility: 302 Buildings, Culture and

Environment ‘[T]hrough the last forty

centuries China must have matured her

thought and learned many lessons in the art

of living. . . . Surely, with China’s four

hundred million people [in 1930], four

thousand years of culture and vast

resources, she must have something to

contribute to the peace and progress of

mankind.’ One of the main reasons why the

Chinese have a nagging sense of being

‘behind’ is because the ‘modern’ is so often

defined in narrow terms of technical and

scientific progress, comfort and wealth, and

the pre dominant but non-sustainable

Western consumer society. If ‘modern’ were

defined as achieving the next stage in an

evolving society – the family of man in a

functional ‘neighbourhood of nations’

(Toynbee, 1987), then China would sooner

find its voice. Distracted by the Western

material development paradigm, China’s

spiritual, philosophical and artistic potential

and resources are underestimated. China’s

appreciation of transcendent

understandings is inhibited by an

overemphasis on material development and

further slowed by a cultural self-deprecating

nature. If the next stage in cultural evolution

is the establishment of a transnational

community, and if that is the purpose of

globalisation, then Chinese concept of Tian

Xia Yi Jia (All under heaven is one family), for

example, is an obvious congruence of

thought. The essence of Chinese thought is

harmony, unity of opposites, reciprocity; its

heroes and champions of justice are poets

and philosophers. The spirit of China’s art,

much of its poetry, and especially its garden

design prefigure one of the essential

concerns of sustainability – harmony

between man and nature. The more China

locks itself into a material definition of

modernisation, the less it will see its own

potential value and the harder it will be for it

to find its heritage of any relevance to

modern life. The current architec tural

‘barbarism’, including superficial borrowings

from the West, is more the result of a lack of

China’s own development than of emulation

of the West; more a bowing to a mechanistic,

technical view of development than a

consequence of foreign stylistic domination.

As Dr Farzam Arbab (2000) says: ‘However

thrilling the prospects may be, present

patterns of behaviour do not inspire

confidence in the process. It is only natural

to wonder whether globalization will, in fact,

unify the human race without imposing

uniformity or simply propel the

universalization of the culture of

consumerism. Is it the bearer of prosperity

for the masses or the mere expression of the

economic interests of a privileged few? Will

Contemporary Chinese Architectural and

Planning Practice 303 it lead to the

establishment of a just order or to the

consolidation of existing structures of

power? ‘. . . [T]he pattern of economic

growth being replicated has proven so

detrimental to the environment as to call its

viability into question. The challenge of

bringing prosperity to all the peoples of the

world through a process of sustainable

development will not be met solely by the

application of technology and the expansion

of current schemes of organisation. It

demands a radical departure from the

materialistic philosophies that have created

today’s concurrence of abject poverty and

irresponsible wealth.’ Arbab, 2000

Conclusions The current situation of

architectural and urban design in China has

been described as problematic. Many ideas

are transferred or transplanted from the

West without question into China by

architects, developers and government.

These ideas and forms are often socially,

culturally and environmentally

inappropriate. The nature of the built

environment has changed from being

symbolic and functional to primarily

functional. Symbols of modernisation have

become Western-style office towers and

highway overpasses. The efficacy of this

emphasis on functionality is called into

question. His toric parts of cities are

destroyed; valuable farmland and

environmentally protected areas are

consumed by expanding cities; the

advantages of a frugal lifestyle and compact

cites are abandoned in new suburbs; and the

vast scale of the projects frequently

contributes to the ‘barbaric’ and ‘chaotic’

nature of the urban landscape. In the

developers’ race to make money, the more

thoughtful architects and planners often

keep their scruples and doubts to

themselves. As a consequence of China’s

current rapid change toward a market

economy, Chinese people are questioning

the relevance of their heritage. It has been

difficult to focus on global issues such as

sustainability when even young architects

and planners are loaded with commissions

to design large tracts of the city. The prestige

and remuneration, along with the entailed

overwhelming workload, leave little time or

energy to contem plate a larger view. 304

Buildings, Culture and Environment Fig. 17.7

Chinese vernacular village architecture in the

Nan Xi Jiang area of Zhejiang Province The

current architectural ‘barbarism’, including

borrowings from the West, is the result of a

lack of China’s internal development. An

endoge nous process of re-evaluating the

emerging Chinese city and urban life will be

a necessary part of the solution. There are

aspects within China’s philosophical and

artistic heritage that may contribute to a

radical depar ture from the current

materialistic philosophies and the culture of

con sumerism, which have proven so

detrimental to the environment. The more

the viability of the current paradigm is

questioned, the more China might find itself

scanning its own resources and traditions.

This will entail redefining ‘modern’ as

sustainable in cultural, economic and aes

thetic terms and seeking solutions which are

both modern and Chinese. The most

potential to influence sustainable ideas

positively resides in the f irst generation of

Chinese architects and planners educated

after the Cul tural Revolution, who may be

able to integrate principles and concepts

from China’s past with contemporary needs.

Many in this group have greater theoretical

depth by virtue of their travel and exposure

to the West and are best equipped to guide

its application (or not) to modern China. This

generation is also the first to be aware of the

environmental challenge, and the need to

integrate ecological criteria into human

settlement design. A deeper search for the

relevance of China’s heritage may be lengthy

and follow an uneven course, but it would be

wise to commence a programme of research

now in order to develop internal and

appropriate capabilities and a vocabulary for

questioning and adapting external

technologies to Contemporary Chinese

Architectural and Planning Practice 305

China’s needs. Strategies are needed for

deciding whether to adapt generic principles

or specific ideas, or to adopt proven foreign

technologies. Research into urban

sustainability could include: • form issues

such as density, urban design for higher

densities, block size, the relationship

between density and transportation •

process issues involving urban development

over time e.g. less author itarian and more

participatory methods of urban

development, and the application of Agenda

21 • practical techniques now being

developed in several Western countries to

integrate natural processes and urban

development The complexity and scope of

the problem suggest additional support is

also needed. The process of forging a

Chinese identity of place cannot depend

solely upon the inspiration of a few well-

travelled architects. The process will have to

engage a variety of stakeholders in the built

envi ronment from occupants to planners

and economists. The significance of ‘top-

down’ decision making in China suggests

high-level leadership must also be

committed before effective change can be

implemented. There fore, part of the process

must include an expansion of persuasive

argu ments. A review of skills and capabilities

within the higher educational system is

needed to assist designers to understand

and appreciate regional culture, regional

identity, and sense of place. Architects,

developers and other decision makers in the

built environment will need new capabili ties

to filter the growing possibilities presented

by international trade and local aspirations.

This research would provide a practical

focus, but in addition would ultimately

strengthen the voice of the ‘seekers’ among

China’s architects and planners. References

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Design. Oxford University Press, Oxford.

Alexander, C., Ishikawa, S. and Silverstein, M.

(1977) A Pattern Language. Oxford

University Press, New York. Arbab, F. (2000)

Introduction. In: The Lab, the Temple and the

Market (ed S. Harper). International

Development Research Centre, Ottawa.

Bhatt, V., Navarrete, J., Casault, A., Zhang Jin,

Zhou Qin, Huang Qin, Fu Guo Hu, Yang

Wenyan and Wu Xiao Zhong (1993) Housing

a Billion: Design Ideas for Rural China.

Research Paper 14, Minimum Cost Housing

Group, McGill Uni versity, Montreal. 306

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Blumenfeld, H. (1971) The Modern

Metropolis. Harvest House, Montreal.

Balser, W. (1979) Courtyard House in China.

Birkhauser Verlag, Basel, Boston and

Stuttgart. Degagne, A., He, H.Y. and Carter, J.

(1997) Housing Export Opportunities Series:

China. Canada Mortgage and Housing

Corporation, Ottawa. Fairbank, J.K. (1992)

China: A New History. Harvard University

Press, Cambridge, MA. Garvin, A. (1996) The

American City: What Works, What Doesn’t.

McGraw-Hill, New York. Giedion, S. (1973)

Space, Time and Architecture Part VIII ‘City

Planning as a Human Problem’. Fourth

printing Harvard University Press,

Cambridge, MA. Givoni, B. (1998) Climate

Considerations in Building and Urban Design.

Van Nostrand Reinhold, New York.

Government White Paper Adopted by the

State Council of the People’s Republic of

China (1994) China’s Agenda 21. China

Environmental Science Press, Beijing.

Grinberg, D.I. (1982) Housing in the

Netherlands 1900–1940. Delft University

Press, Delft. He, H.Y. and Carter, J. (1996)

Regeneration of Old Residential Districts:

The Case of Beijing, Housing for Millions: The

Challenge Ahead Conference Papers Housing

Conference, 20–23 May 1996. Kelbaugh, D.

(ed.) (1989) The Pedestrian Pocket Book.

Princeton Architectural Press, New York. Li

Yan He (1984) Cathay’s Idea: Design Theory

of Chinese Classical Architecture (in

Chinese). Liang, S.C. (1984) A Pictorial

History of Chinese Architecture. MIT Press,

Cambridge, MA. Lim, S.W. and Tan, H.B.

(1998) The New Asian Architecture:

Vernacular Tradi tions and Contemporary

Style. Periplus Editions, Hong Kong. Liu, E.R.

and Yi, F. (1997) Chinese Architecture Since

1980. Encyclopedia of China Publishing

House, Beijing. Mendler, F.M. and Odell, W.

(2000) The HOK Guidebook to Sustainable

Design. John Wiley and Sons, New York.

Moughtin, C. (1996) Urban Design: Green

Dimensions. Butterworth Architecture,

Oxford. Porter, D.R. et al. (2001) The Practice

of Sustainable Development. Urban Land

Institute, Washington, DC. Ruan, Y.S. (1996)

The Traces of China’s Ancient Towns. Hai

Feng Publishing Co., Hong Kong. Spence, J.

(1990) The Search for Modern China. W.W.

Norton, New York and London. Steinhardt,

N.S. (1999) Chinese Imperial City Planning.

University of Hawaii Press, Honolulu. Thom,

B. (1994) Dalian New Town, Self-published

design report, Vancouver, BC. Zhou, J. (2001)

Urban Housing Design. China Architecture

and Building Press, Beijing. 18 A Bioregional

Approach to Environmental Building – A Case

Study of the KST House David H. Cohen, Akira

Yamaguchi and John D. Spengler

Introduction Before addressing the

bioregional philosophy of Kinoshiro Taisetsu

Cor poration – Hokkaido (KST) – it is

necessary to provide some background and

establish the context of the strong

bioregional ethic that drives so much of the

organisation and operations of this

company. KST builds houses in the northern

island of Hokkaido, Japan. Its business is built

on a strong philosophical foundation, which

is universal in scope, and drives all aspects of

KST operations including the development,

design, con struction, and after sales service

of all models of their houses (Preston, 1998).

This philosophy combines practical

applications and actions that address the

following four ethical mandates:

social/regional concerns, cul tural links to

tradition and ancient wisdom, the ability to

operate an economically viable business

and, most of all, environmental concerns.

Each of the more than 16000 houses built by

KST addresses key aspects of each of these

concerns in design, material selection and

construction. In turn, each of these

concerns, including environmental, are

addressed by a core commitment towards

bioregional actions. To ensure adherence to

this philosophy, referred to as ‘the total

system’ in the company liter ature, KST is a

vertically integrated company controlling all

aspects of their business from design, to

milling logs and building their own wood

materials to operating the factory that

creates consistent building com 308

Buildings, Culture and Environment Fig. 18.1

Summary of KST philosophy with expansion

of environmental aspects (adapted from

Yamaguchi and Cohen, 2000) ponents to

sales, construction and after sales service.1

This system incor porates many factory-built

components as well as traditional

construction techniques from historic

Japanese temple construction (Cohen et al.,

1996). The total system and its

environmental components are shown in

Fig. 18.1. While the philosophy is broad, its

practical application by KST is limited to the

region of Hokkaido, Japan. This philosophy

has been developed since the early 1950s by

Akira Yamaguchi, the founder and driving

force behind this company. These

philosophical foundations are extremely

complex, marrying antithetical concepts on a

normative and practical plane (Preston,

1998). However, the marriage of opposites

such as 1Much of the information regarding

the KST philosophy has been gathered during

numer ous visits and interviews between the

authors and the managers, employees and

customers of KST and Fuyosoken (the Winter

Research Institute) from 1995 until the

present (late 2002). A Bioregional Approach

to Environmental Building 309 technology

and ancient craft is best left to a more

suitable venue, as are other innovations in

the design, sales, construction and use of the

KST house. The environmental portion of the

‘total system’ philosophy consists of four

areas of emphasis: minimising the ecological

footprint, ensuring a healthy indoor

environment particularly indoor air quality,

reducing energy consumption, and

producing houses with increased longevity

(see Yamaguchi and Cohen, 2000, for a fuller

discussion). Underlying both the overall

philosophy concerning society, economy,

the environment and culture and the four

environmental cornerstones is a deep

commitment to bioregionalism. To better

understand the strong commitment to biore

gionalism it is necessary to have a basic

understanding of Japan and its relationship

to Hokkaido. Hokkaido – background Japan is

a nation of four major islands stretching in an

arc of 3000 kilometres from 30° to

approximately 46° latitude. The islands, from

the south, are Kyushu, Shikoku, Honshu and

Hokkaido. These islands are dis tributed

across 16° of latitude, creating a biological

and climatic diversity equivalent to the

changes from New Orleans to Montreal or

from Mar rakech to Paris. The northern

island of Hokkaido has a sub-arctic climate

and experiences six winter months complete

with high snow levels and temperatures

below freezing point. At the opposite end of

Japan, the southern island of Kyushu has a

sub-tropical climate and experiences high

heat, monsoons and very high humidity

(adapted from Anonymous, 1992; 1995a,b;

1998). Population, climate and area

Hokkaido has an area of 83500km2

(including 5000km2 of the disputed

Northern Territories), and so is equivalent to

the area of Austria. Despite representing half

the total land area of Japan, Hokkaido has

only 4.6% of the population or 5.65 million

people (1999 data).2 Almost a third of the

inhabitants (31%) live in Sapporo, the largest

city and the capital of Hokkaido. Another

21% live in the next largest five cities with

popula tions less than 400000 (Askikawa

360000; Hokodate 310000; Kushiro 210000;

Obihiro 170000; and Otaru 160000). The low

population density 310 Buildings, Culture

and Environment Table 18.1 Land use in

Hokkaido (1998) km2 % of total forests

agriculture open water f ields roads

residential other 55553 12263 2663 1843

1669 1090 3305 70.8% 15.6% 3.4% 2.4%

2.2% 1.4% 4.2% total 78386 Source: White

Book of Land Use (1998) Hokkaido

Government (72 per km2) makes Hokkaido

the least crowded region of Japan. Residen

tial land use accounts for only 1.4% of the

total (Table 18.1). Hokkaido is located in the

transition zone between the temperate and

sub-arctic zones, resulting in it being the only

region of Japan to avoid the influence of the

hot humid season (tsuyu) and have four

distinct seasons. Average temperatures

range from a low in January of -5°C to a high

in August of 27°C. However, temperatures

are more severe (2–4°) inland and in the

north. On average the first snowfall occurs in

October and the last in April, resulting in five

to six months of winter.3 The weather in

Hokkaido is similar to that in Stockholm,

Copenhagen, Berlin, Toronto and Chicago.

Despite its vast size relative to its population

and the relatively harsh climate compared to

the rest of Japan, Hokkaido has a very

efficient trans portation system. Its rail

system reaches almost all parts of Hokkaido.

Sapporo, the capital, has a modern and

efficient subway system and myriad

underground shopping malls connecting

most of the downtown area. The natural

environment Hokkaido, the largest of all of

Japan’s prefectures, is rich in a diverse

natural environment consisting of

mountains, coastline and plains. The 2Japan

Statistical Yearbook (2001) (CD ROM version)

Table 2–3: Population by prefecture. Data

from Statistics Bureau, Management and

Coordination Agency, Tokyo. 3Japan

Statistical Yearbook (2001) (CD ROM version)

Table 1–12: Temperature, relative humidity,

duration of sunshine, precipitation, frost and

snow (normal values) (av. 1961–90)

Observations Department, Meteorological

Agency, Tokyo. A Bioregional Approach to

Environmental Building 311 f lora is a mix of

temperate deciduous trees (e.g. oaks,

lindens and maples) and sub-arctic

evergreens such as the firs. Low population

levels and the fact that Hokkaido was only

colonised and heavily populated in the late

nineteenth century have left an island rich in

flora and fauna. The red-crested white

cranes, white owls, and sea eagles are

officially designated as precious natural

products. To quote from Japan, Profile of a

Nation (Anonymous, 1995a, p. 12):

‘Hokkaido is noted for its dramatic and

unspoiled scenery, which includes active

volcanoes, large lakes and vast virgin

forests.’ Table 18.1 illustrates the rural

nature of the landscape. The abundance of a

relatively untouched natural environment,

well developed ski hills, over 200 hot springs

and a well developed system of camping

grounds makes Hokkaido an important

vacation destination for many Japanese from

all of the islands. The population of Hokkaido

are very proud of their natural heritage, and

it is a focal point for much of their promotion

and advertising activities. Industry and

economy The GDP of Hokkaido is almost 14

trillion yen (approximately US$ 100bn),

equivalent to that of Denmark or Finland.

Hokkaido plays a central role in domestically

produced agricultural products. Rice, vegeta

bles and dairy products as well as salmon

and scallops are shipped all over Japan. The

processing of agricultural products is the

backbone of the man ufacturing industry in

Hokkaido, which represents only 12% of the

economy compared to a national average of

almost 29%. The fishing industry, while only

a shadow of former times, still provides 20%

of the national total. Tourism is the main

driver for the growing service, whole sale

and retail sectors with a growth in resorts

based on the natural envi ronment. Winter

ski resorts, abundant summer camping and

year round hot springs contribute to making

tourism, for Japanese residents from all four

islands, a growing and vital part of the

island’s economy. Table 18.2 shows gross

domestic product summarised by activity

and compared to the national average. It is

clear that Hokkaido, which accounts for 4%

of Japan’s GDP, is more heavily focused on

the primary and tertiary indus tries, as

detailed above. This lack of manufacturing

contributes to the maintenance of the rural

and natural environment, which provides for

agriculture, fishing tourism and services.

Most products that leave Hokkaido are

shipped to the other, more popu lated,

islands of Japan. However, the availability of

good ocean ports leads 312 Buildings,

Culture and Environment Table 18.2 GDP of

Hokkaido and Japan for 1998 1996 1997

1998 total total total primary secondary

tertiary Japan GDP (billions of yen) as % of

total 1998 GDP Hokkaido (billions of yen) as

% of 1998 GDP 509931 506079 498017 7118

1.4% 20116 19882 19747 738 3.7% 159752

32.1% 4684 23.7% 351312 70.5% 14851

75.2% Source: Japan Statistical Yearbook

(2001) Table 1-14b Prefectural accounts

major components (1996–99) (data from

Department of National Accounts, Economic

and Social Research Institute, Cabinet Office,

Tokyo) Note: Primary industries refer to the

basic extraction of raw materials such as

forestry, fishing and agriculture. Secondary

industries refer to manufacturing including

the manufacturing of the afore mentioned

raw materials into finished goods. The

tertiary industries refer to the service, retail

and wholesale sectors. to relatively high

levels of imports, with a ratio of imports to

exports of more than 8:1. The major imports

are fuel (oil), wood products and seafood.

Hokkaido has abundant forests and could be

self-sufficient in wood products, but for a

multitude of reasons (e.g. currency exchange

rates, lack of manufacturing infrastructure,

and intense foreign competi tion) imports

much of its wood products from Europe,

North America, Russia and New Zealand. The

major exports are machinery (mostly auto

mobile), pulp and paper, and fish products

(such as fish oil). Note: Economic and

industrial data in this section from

Anonymous (1992; 1995b) and SAS (1992).

The Hokkaido way of life The people of

Hokkaido are still connected to the land, as

reflected in their economic ties with

agriculture, forestry and tourism based on

outdoor activities. Compared to many

Japanese, they are less focused on

materialism and have a strong sense of

nature and the environment. The people

celebrate nature with winter and summer

festivals. To quote from the Hokkaido Long-

Term Comprehensive Plan 1998–2007

(http://www.pref.hokkaido.jp/skikaku/sk-

kkaku/gaiyo/p02-03.html): ‘Values are

changing, from material wealth to spiritual

wealth and quality of life. There is a growing

interest in Hokkaido’s attractive nature,

unique climate and natural features. Based

on the results of past A Bioregional Approach

to Environmental Building 313 development

in Hokkaido, efforts will be made to utilize

Hokkaido’s characteristics and fulfil its

potential by reviewing local resources based

on broad perspectives.’ The entire plan

continually emphasises a regional (rather

than a national) perspective based on the

rich natural environment, with a strong

thread of environmental responsibility

permeating all aspects of the plan. This

clearly establishes fertile ground for a

bioregional approach based on a strong

environmental ethic. The bioregional

philosophy The basic philosophy of

bioregionalism follows the imperative to use

regional inputs (such as raw material and

labour) to produce regional outputs (such as

housing) that are designed specifically for

that region. This philosophy is more than just

sourcing local materials but incorpo rates

design, production and use (Malin, 1996).

The philosophy focuses on developing

sustainable bioregions by using the

resources of the region to produce products

that are designed specifically for that region

and retain ing the financial and social

benefits within that region. This should not

create barriers to imported concepts, ideas

or even products but instead is inspired by

innovation and seeks to replace imports with

regionally modi f ied and produced products

that are more bioregionally suitable and

create a smaller ecological footprint. Thus, it

is more of a continuous process in a state of

fluidity rather than a static set of rules and

regulations. KST includes in its bioregional

philosophy a uniquely Japanese model of sus

tainability or living in harmony with nature.

Two factors, increasing use of locally

available renewable materials and an

emphasis on durability and longevity, both

promote sustainability. Implementing these

philosophies requires a long-term

perspective and redefining ‘shareholder

value’ to incorporate societal valu

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