96549089 Palm Jumeirah Project Management Report

Project  Management  Assignment:  Part  A]    Palm  Jumeirah  

Executive  Summary  

This  report  gives  an  overview  and  analysis  of  the  Palm  Jumeirah  project  in  Dubai.  The  Palm  is  a  large  artificial  island  built  off  the  cost  of  Dubai  and  used  for  luxury  tourism,  leisure  and  housing  developments.  The  project’s  main  aims  and  objectives  were  to  strengthen  Dubai’s  international  recognition  and  attract  foreign  investors  to  help  diversify  its  economy.  This  was  to  be  achieved  by  constructing  the  island  in  as  short  time  as  possible  and  then  allowing  multiple  investors  construct  their  own  developments  on  the  island.  Because  of  the  time  pressure,  Nakheel,  the  developer,  chose  to  fast  track  the  land  reclamation  and  development  stages  before  the  finalisation  of  earlier  research  and  planning  phases.  This  decision  led  to  a  mixed  outcom  in  terms  of  project  management  and  deadlines  because  of  changing  plans,  design  and  organisational  structure.  However,  the  project  was  highly  successful  at  achieving  its  socio-­‐economical  objectives  and  is  now  a  key  feature  of  Dubai’s  international  prestige  and  economic  strategy.  

Table  of  Contents  

EXECUTIVE  SUMMARY   1  

INTRODUCTION   2  STAKEHOLDERS  &  AIMS   2  OBJECTIVES  &  STRATEGY   2  

PALM  JUMEIRAH  TODAY:  PROJECT  OVERVIEW   3  EVALUATION  OF  PROJECT   4  DESIGN,  PLANNING  AND  LIFE  CYCLE   4  ORGANISATIONAL  STRUCTURE   5  

CONCLUSION   6  

BIBLIOGRAPHY   6    

Introduction  

The  Palm  Jumeirah  is  a  large  artificial  island  built  off  the  coast  of  Dubai  comprising  villas,  leisure  and  entertainment  facilities.  Between  2001  and  2004,  it  was  the  world’s  largest  and  most  ambitious  project  of  its    kind,  involving  over  25km2  of  new  land  being  created  and  extending  Dubai’s  beaches  by  about  78  km.    

The  Palm  Jumeirah  takes  the  shape  of  a  palm  tree  and  is  divided  into  three  main  sections:  the  trunk,  which  is  1.9km  long  and  500m  wide  is  considered  the  “hub”  of  the  palm  because  it  consists  mostly  of  commercial,  retail  and  hotel  infrastructure.  The  fronds  and  the  spine  are  attached  to  the  trunk  and  extend  into  the  sea  laterally.  They  vary  in  length  from  600m  to  2km  and  are  mostly  residential  villas.  Finally,  the  crescent  is  an  elliptical  shaped  island  surrounding  the  Palm  offering  shore  protection  on  its  outer  side  and  luxury  hotels  land  use  and  beaches.  

Stakeholders  &  Aims  In  1993,  the  government  of  Dubai  initiated  a  new  phase  in  its  ambitious  socio-­‐economic  plan  to  diversify  the  country’s  economy  away  from  oil  and  gas.  It  founded  Nakheel,  an  Urban  Development  Company  whose  aim  was  to  develop  large  projects  and  attract  foreign  investment.  In  2000,  the  Dubai  government  and  Nakheel  signed  an  agreement  to  build  the  Palm  Jumeirah  as  the  concept  was  strongly  supported  by  the  Sheikh  Mohammed.  The  initial  aims  of  the  project    were  to:  

1) Achieve  pioneer  status  worldwide  and  improve  Dubai’s  international  standing  2) Initiate  and  promote  a  tourism  based  local  economy      3) Build  new  coastal  areas  as  Dubai  had  already  maximised  the  use  of  its  current  

shoreline  

The  most  important  benefit  was  therefore  to  bring  international  attention  and  fame  to  the  small  country  through  an  ambitious  and  unique  project  and  kick-­‐start  its  urban  development  plan  and  tourism  industry.  This  leads  to  the  discussion  of  the  main  objective  and  strategy  used  at  the  beginning  of  the  Palm  Jumeirah  Project.  

Objectives  &  Strategy    The  project  was  divided  into  three  main  phases:  

1) Identification  of  goals  2) Project  design  3) Project  implementation  

a. Reclamation  of  land  b. Building  infrastructure  c. Building  development  

The  most  important  objective  of  the  project  was  to  complete  the  construction  of  the  island  (reclamation  of  land)  as  soon  as  possible  so  as  to  achieve  pioneer  status  and  fame.    This  would  then  allow  for  the  construction  of  hotels,  villas  and  facilities  which  would  involve  as  many  foreign  investors  as  possible  to  decrease  cost  for  the  local  government  and  further  improve  international  recognition  of  Dubai.    

As  a  result,  Nakheel  used  the  following  strategy:  the  first  initial  two  phases  (identification  and  project  design)  were  led  and  implemented  by  Nakheel  in  as  short  time  as  possible.  The  responsibility  of  the  land  reclamation  phase  was  given  to  a  single  contractor  and  started  as  soon  as  initial  plans  were  ready  with  the  main  objective  being  time.  Meanwhile  Nakheel  carried  on  with  the  project  design,  promoted  the  project  to  foreign  investors  and  coordinated  their  involvement  in  the  latter  stage.    

The  key  features  of  the  project  as  designed  and  planned  in  the  early  stages  are  summarised    below:  

Area   5.6km2  Construction  start   2001  Land  reclamation  target   Beginning  2004  Construction  completion  target   2008  Total  estimated  cost   4  –  6  bn  $  Number  of  housing  units   4000  Number  of  hotels  on  crescent     22  

Palm  Jumeirah  today:  Project  overview  

As  of  2011,  the  Palm  Jumeirah  project  is  nearly  fully  completed  yet  some  key  features  and  timeline  differ  from  the  early  stages  plan.  In  particular:    

Land  reclamation  finish   End  2003  Completion  time   2008  -­‐  2010  Total  estimated  cost1   12.3bn  $  Number  of  housing  units2   8000  Number  of  hotels  on  crescent   28    

The  project  time  line  is  shown  below:  

                                                                                                               1  http://www.2daydubai.com/pages/dubai-­‐palm-­‐jumeirah.php  2  http://www.telegraph.co.uk/property/3344183/Palm-­‐before-­‐a-­‐storm.html  

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Evaluation  of  project    In  view  of  its  initial  aims  and  objectives  the  Palm  Jumeirah  project  has  achieved  both  successes  and  failures.    

Successes:    

The  land  reclamation  phase  was  completed  4  months  prior  to  deadline  and  established  new  records  in  terms  of  size  and  volume.  Meanwhile  the  land  usage  and  housing  developments  sold  out  within  days  and  was  the  target  of  much  international  attention  and  speculation.  This  peaked  when  several  members  of  the  UK  national  football  team  expressed  interest  and  invested  in  the  project.  The  global  interest  and  demand  for  the  Palm  Jumeirah  led  to  the  development  and  construction  of  two  larger  islands  off  the  coast  of  Dubai  which  started  in  2004.    

As  a  result,  the  initial  aims  of  achieving  pioneer  status  while  sparking  foreign  interest  in  the  tourism  and  urban  development  industry  in  Dubai  was  clearly  attained.  

Negative  aspects:  

On  the  other  hand,  revisions  of  the  plan  and  design  of  the  building  development  caused  many  hotels,  infrastructures  and  facilities  to  be  completed  behind  schedule,  some  more  than  2  years  after.  The  Palm  now  comprises  over  8000  housing  units,  twice  the  original  number  and  costs  overran  to  approximately  $12.3bn.  Property  owners  and  developers  complain  about  the  Island’s  overcrowding  and  insufficient  infrastructures.  

The  mixed  outcomes  of  the  Jumeirah  project  lead  to  the  analysis  of  how  the  project  was  carried  out  and  how  effective  were  the  strategies  put  in  place.  This  involves  the  design  and  planning,  the  overlapping  of  stages  in  the  project  lifecycle  and  the  project’s  organisational  structure.  

Design,  planning  and  life  cycle  The  importance  of  the  time  objective  led  to  the  decision  to  fast  track  the  3rd  phase  before  the  finalisation  of  research,  design  and  planning.  The  land  reclamation  stage  began  before  R&D  was  completed  and  building  development  (hotels,  houses)  began  as  soon  as  infrastructure  (electricity,  water,  roads)  was  completed  locally.  This  led  to  two  major  changes  in  the  design  of  the  Palm,  which  had  different  impacts  on  the  overall  project.      

Midway  through  the  land  reclamation  stage,  engineers  discovered  that  water  was  stagnating  inside  the  Palm  and  could  compromise  the  entire  project  because  of  the  hazard  to  health  and  well-­‐being.  Nakheel  had  neglected  this  important  aspect  of  R&D  and  the  solution  was  to  change  the  design  of  the  outer  crescent  and  create  gaps  in  the  structure  such  that  outer  sea  could  enter  the  Palm  more  easily.  The  company  responsible  for  the  reclamation3  phase  was  able  to  cope  with  this  sudden  change  because  it  was  the  only  party  involved.  They  changed  their  plan,  hired  additional  resources  and  finally  delivered  4  months  ahead  of  schedule.  

The  second  significant  change  in  the  design  of  the  project  occurred  during  the  building  infrastructure  stage.  Developers  had  underestimated  overall  cost  and  needed  to  double  the  density  of  land  development  for  the  project  to  be  financially  viable.  For  example,  the  

                                                                                                               3  Van  oord  (Netherlands)  

number  of  residential  units  sold  on  the  Palm  was  increased  from  4000  to  an  estimated  8000.  Plans  and  infrastructure  were  changed  multiple  times  which  led  to  significant  setbacks.  In  this  case  the  overall  construction  phase  fell  behind  schedule  for  two  main  reasons:  

• The  building  development  and  infrastructure  stages  were  happening  in  parallel,  meaning  changes  in  one  directly  impacted  the  other  creating  major  perturbations  in  supply  schedules  and  resource  usage.  

• Because  of  Nakheel’s  strategy,  which  aimed  to  attract  foreign  investment,  over  50  different  contractors  were  involved  in  the  latter  stage  of  the  Palm  Jumeirah.  The  resulting  complexity  made  it  impossible  to  deal  with  the  design  and  planning  changes  efficiently.      

Organisational  structure  As  Nakheel  changed  the  project  scope  and  design  during  the  3rd  phase  to  comply  with  its  financial  and  foreign  investment  objectives,  it  also  changed  the  project’s  organisational  structure  multiple  times.  The  structure  evolved  from    

• A  single  project  manager  overseeing  consultants  for  each  section  of  the  project      • A  global  project  director  and  project  management  team  and  multiple  individual  

project  managers  for  different  sections  each  overseeing  consultants  and  contractors    

As  the  project  became  increasingly  more  complex  with  the  addition  of  new  contractors  and  investors,  so  did  the  organisational  structure.  This  led  to  a  confusing  hierarchy  where  the  position  and  authority  of  different  parties  was  unclear  and  confusing.    

As  an  example,  local  project  management  teams  overseeing  the  construction  of  hotels  would  sometimes  refer  directly  to  Nakheel  instead  of  their  direct  superior  in  the  structure  because  the  developer  was  considered  a  more  reliable  source  of  authority.  The  program  direction  and  management  team  were  therefore  left  outside  the  information  

Project  organisational  structure  during  phase  1&2  

Project  organisational  structure  during  phase  3  

chain  and  Nakheel  would  make  decisions  without  them.  This  resulted  in  multiple  decisions,  plans  and  allocations  of  resources  being  made  simultaneously,  which  considerably  slowed  down  the  project  and  created  confusion  and  frustration  amongst  the  various  contractors.  

Conclusion  

From  a  project  management  perspective,  the  Palm  Jumeirah  suffered  from  a  lack  of  initial  R&D  and  planning,  which  translated  into  multiples  changes  of  design  and  organisational  structure.  The  strategy  to  start  the  building  and  development  phase  3  before  the  completion  of  the  two  initial  phases  led  to  a  mixed  outcome.  On  one  hand  the  land  reclamation  stage  was  a  striking  success  in  time  and  scale  because  it  was  assigned  to  a  single  contractor  under  a  clear  project  structure.  On  the  other  hand  the  later  stages  gave  rise  to  an  increasingly  complex  project  with  multiple  hierarchies  and  contractors,  which  were  unable  to  cope  with  the  fast-­‐tracking  strategy.  

Nevertheless,  we  can  argue  that  the  Palm  Jumeirah  successfully  achieved  its  main  objectives,  which  were  to  improve  Dubai’s  international  standing  and  open  its  economy  to  foreign  investment  and  luxury  tourism.  The  interest  and  demand  for  the  Palm  was  such  that  Nakheel  soon  launched  two  bigger  artificial  islands  projects:  Palm  Jebel  Ali  and  Palm  Deira.  Moreover,  Dubai  is  now  a  global  business  and  tourism  hub  and  has  opened  its  economy  to  large-­‐scale  foreign  investment.    

Bibliography  

Reports  and  Thesis  

Darmaki,  I.  A.  (2008).  Globalisation  and  Urban  Development:  A  Case  Study  of  Dubai's  Jumeirah  Island  Mega  Project.  PHD  thesis,  University  of  Southampton,  School  of  Geography.  

Orrill,  A.  R.  (2006).  Strategies  to  Overcome  Challenges  on  Multi-­‐cultural  Construction  Projects  in  the  UAE.  Collaboratory  for  Research  on  Global  Projects.    

Web  

2daydubai.  (n.d.).  Dubai  Palm  Jumeirah.  Retrieved  03  20,  2011  from  2daydubai:  http://www.2daydubai.com/pages/dubai-­‐palm-­‐jumeirah.php  

Hanlon,  M.  (2006,  08  08).  The  biggest  building  site  earth.  Retrieved  03  20,  2011  from  dailymail.co.uk:  http://www.dailymail.co.uk/news/article-­‐399673/The-­‐biggest-­‐building-­‐site-­‐earth.html  

Moye,  C.  (2005,  08  20).  Palm  before  a  storm.  Retrieved  03  20,  2011  from  telegraph.co.uk:  http://www.telegraph.co.uk/property/3344183/Palm-­‐before-­‐a-­‐storm.html  

oord,  V.  (n.d.).  Project  selector:  Palm  Jumeirah.  Retrieved  03  20,  2011  from  Vanoord.com:  http://www.vanoord.com/gb-­‐en/our_activities/project_selector/palm_deira_developments/index.php  

Other  

Discovery  Channel:  Really  big  things:  Palm  Jumeirah  [Motion  Picture].