Smart city business case: the Alba Iulia experience

The concept of urban digitalization is gaining ground in Romania, with the first figures on the economic benefits emerging from the first city spearheading this effort. A new report published by German engineering group Siemens predicts that the development of Alba Iulia under smart city principles could yield total estimated benefits of EUR 532 million over the course of 35 years, says Business-Review.eu.

The western city, home to the 17th-century Alba Carolina Citadel, is focusing its smart development on connectivity, transport and energy, according to the report, which also assessed the benefits of such investments in Scottish city Aberdeen, London, Brussels and the Kartal neighborhood of Istanbul. Siemens worked on the report in partnership with professional services firm Arup.

“We met with all the cities, spent some time with them and other stakeholders, so in Alba Iulia we had the universities in attendance, with other interested parties, to really discuss and understand the ambition of the city, how it wants to develop economically, its driver. Very quickly in Alba Iulia, it became clear to the team that the driver was really about expanding the economy through increases in tourism, upgrading standards for residents and becoming a better connected city at the heart of Romania,” said Julie Alexander, director for urban development and smart cities, lead global cities centre of competence, at Siemens London.

Alba Iulia has inked partnerships with a series of technology firms that are working on pilot projects there. In fact, it has ramped up this program as it prepares to mark Romania’s centenary, with Alba Iulia being the place where the union of Romania was made official in 1918. Officials want to finish several smart tech initiatives in time for next year’s celebrations. The city has attracted tech giants such as Microsoft and telecom players Orange and Telekom. The municipality lends an ear to start-ups as well, and earlier this year the town hosted a hackathon for the development of new solutions.

“All the firms that understood what this application means came to Alba Iulia; we signed partnerships through which they came and made applications. There are almost 300 smart lighting units. It is an exercise to see what can be done, and of course things will move forward,” said Mircea Hava, the mayor of Alba Iulia, during a conference in which the findings of the report were made public.

The report suggests that if the city invests EUR 227 million in smart technologies, it could reap more than half a billion euros in benefits in 35 years. The payback period for the investment would stand at ten years.

Smart energy infrastructure would require the biggest initial investment of EUR 215 million over four years, and the study puts the cumulative direct and indirect benefit after 35 years at EUR 426 million.

In addition, the city would continue to register EUR 34 million annually in direct and indirect benefits after this period. Most of the initial investments would be required for smart grids. Smart connectivity, including free Wi-Fi, and smart transport, which would also support the development of real-time journey planning and smart parking, are smaller-scale projects that require smaller amounts of funding.

On its side, the municipality has already announced plans to develop the urban infrastructure and is currently looking for financing opportunities.

The municipality is seeking to secure financing for investments of EUR 22 million in transport infrastructure. This would include the modernization of roads, the deployment of smart traffic light systems and special bike lanes. Another EUR 16 million should be invested in the thermal rehabilitation of 30 apartment blocks, which should make the heating of homes more efficient. Moldovan said the city is also exploring investments in Virtual Reality/Augmented Reality projects, primarily for the Alba Carolina fortress, the city’s main tourist attraction.

 

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