Dubai may have to spend more in the run-up to Expo 2020

In a sense, the UAE has been one big project ever since independence in 1971, a planned exercise in socio-political and economic development that has made the country into a series of interconnected, sophisticated urban centres.

Now, and especially in Dubai, the pace of change has been put into top gear. The megaprojects announced in the emirate in the past few months alone promise to transform the city once more by 2020, when the Expo business exhibition will be staged, and then again in the years after.

But megaprojects elsewhere in the world have a mixed track record. Think of the controversies over Fifa World Cup and Olympic venues; going farther back, think of the glitches – cost overrun, schedule delays, investor angst – that accompanied the 1980s project to link Britain and France via the Eurotunnel. 

Huge infrastructure undertakings – like the Expo site, the new Dubai Al Maktoum airport, the Mall of the World development and the Dubai Canal, to name but a few of the spectacular developments, the emirate is committed to in the next few years – present challenges.

Mark Langley is aware of that, and can offer some solid advice to Dubai and the UAE as they embark on another hectic phase of transformational development.

Mr Langley is the chief executive of the US-based Project Management Institute, and he was in Dubai this week for the inaugural meeting on the Dubai International Projects Management Forum (DIPMF).

He was speaking directly to the most prominent stakeholders in Dubai’s infrastructure plans: the transport supremos at the Roads and Transport Authority (RTA), the suppliers of energy from the Dubai Electricity and Water Authority (Dewa), and the builder-architects from Emaar Properties.

Dubai Culture Village

At some stage, all big projects come up against the triple constraints of time, budget and scope. You may not be able to meet the demands of all three. Dubai is on a schedule defined largely by 2020, so it may have to spend more to get there by the set time

Time and budget are self-explanatory, but by scope he means the reality of the projects themselves, that is the building, road, bridge or airport planned. That too can change in the course of the project, he says.

And to these variables, you must add the ever present threat of “black swan” events like another downturn in the global economic cycle, or socio-political threats.

In a down cycle you’ll see an increase in project delays, but the best policy is to proceed with those that are the most important strategically. This is where you use the benefit of past experience to arrive at risk informed decisions.

Dubai has the benefit of hindsight in two crucial respects here: its experience during and recovery from the global financial crisis of 2009; and its stability during the Arab Spring along with the ongoing convulsions in some parts of the region.

Mr Langley believes Dubai now has the project management expertise to overcome similar challenges should they reappear.

“From my visits here – four in the past year – and especially from what I’ve heard in the DIPMF, Dubai is certainly committed to excellence in project management. In particular, Mattar Al Tayer [chairman of the RTA] has helped raise the level of maturity of the project management profession in the UAE,” he says.

When projects get into trouble or fail altogether, professionals like Mr Langley resort to what they call “multi-variant regression analysis”. Often the biggest reason for the problems is that senior executives involved as stakeholders have not understood the nature of the project. “I don’t think that’s the case in Dubai. I’ve seen a high level of senior executive involvement in and alignment with project management,” he says.

“What makes Dubai different is that elsewhere in the world, especially in the West, the government tends to lag behind the private sector in project management, but in Dubai the leadership certainly has a long-term vision and tends to set the goals for private business.”

But in the end doesn’t it all come down to money? If the developer or the strategic body behind the project has enough cash, surely they can make the project come in on time, if not on budget?

So far, Dubai has been short on detail about the precise cost of the projects on its ambitious schedule, and on how it will fund them.

Mr Langley runs through the traditional project management options. “A government can simply print money. I’m an American and I know all about that,” he says, sceptically. That – government funding – is the model for infrastructure projects in the fast-moving economies of Asia.

“In the West, it tends to be a partnership with the private sector. This lays off risk to governments and also calls in the expertise of specialists, plus it gives the project access to funding via the private sector, like equity, bank borrowing and corporate debt. The government tends to stay out of the process, except in the form of development authorities, like for example London did for the Olympics.”

The buzzword for the London Olympics was, and for the Dubai Expo is, “legacy”, and it is one to which Mr Langley returns: “The priority has to be what happens after the event. It has to make sense in terms of increased economic activity, and to serve as a longer-term catalyst for growth.”

Author: Frank Kane
Source: The National

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