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History and Construction

Question:

Discuss about the Strategic Project Management Of Burj Khalifa.

Burj Dubai was renamed to Burj Khalifa and is located at Downtown, Dubai (ArabianBusiness, 2017). It is the tallest building as of now in whole world. The building construction has started in January 2004 and then after it reached the storied level of 141 during July 2007 it made the first world record of the tallest building, then again after it reached 150 storied in September 2007 it received award ‘tallest standing structure’ and after it attained a height of 160 storied in April 2008 has again received award and finally it was inaugurated in 4th January 2010 (DubaiCityGuide, 2010).

The project has 160 storeys and a total height is 2717 feet (Israel, 2010). To build the structure around 33 thousand Cubic Meter of concrete is used. To build the mega building around 22 Million Man-Hours are invested. It also has the highest going elevator in the world (Emaar PJSC, 2016). Instead of having so many world records in its name and attaining such a large recognition in the world, it has some of the common mistakes which are continuously challenging the building for its success and claiming as a failure even. We shall now go through few literature reviews to conclude.

Burj Khalifa has brilliant records of attaining such a height, but it also has some spots in its name. During the course of the project many fortune happened which has caused delay in the construction schedule. In the total span of the project, twice there was labour strike happened, once the reason was the less compensation is being provided by the contractor and the lowest rate was not revised since long whereas the labours were compelled to work for 12 hours. So one fine day they decided to sit on strike, around 2000 labours went on strike and the job was held up for many days, but no official confirmation regarding the way it was resolved could be found, the labours were again compelled and pressurised by the government to start working or else there can be severe consequences and had to return to work. Once again after few months they went to strike for the want of clean labour camp. The hygiene factor of the labour camp was very poor; they had to live in the pathetic situation (Pile, 2017). Even the sanitation arrangements were also not done properly. There were many cases of suicide of labours by falling from the buildings. Many had to leave the place and go back to their own countries. But gradually the strike was withdrawn and the construction activity continued, but the instances has put a set back at the progress and the phycology of the labour, which could have put many issues in quality and time and so the cost of the building increased and the management had to face an indirect raise in cost of the building.

Challenges During Construction

Now let us discuss some facts about the planning and execution or the project management mess which has happened during the construction of the world’s tallest building. The project was estimated for around 875 Million USD (Bartleby, 2013), but because of various external factor and risks the budget went up nearly 100% overrun. The different factors which have impacted the project are the no or very less risk assessment was exercise was done at the time of planning and so the time and cost both got overrun.


Few other issues in the construction project were the economic crisis in Dubai during 2004. Which was caused due to burst of the bubble which was formed during the years in Dubai and especially it was mainly due to the unnecessary high rate of the real estates. So when the bubble burst that time Dubai was having a debt of 25 Billion USD (Oath Inc, 2010). And out of the total GDP of Abu Dhabi around 26% was being shared by the construction industry and out of which 50% of the whole construction was being shared by Burj Khalifa. So we can very well understand how much the building and its billing cycle could have been impacted due to the economic crisis. Many bills of the execution contractors were on hold, the labours were unable to get their wages on time and many more such issues, and this also caused the labour down cycle and had to leave the country and return to their own countries. The labours were mainly from India, Sri Lanka and Bangladesh.

The debt which caused the Dubai economic crisis could be averted by roll over of 20 Billion USD by two banks in Abu Dhabi (Reuters Staff, 2014). But it has certainly put its deep mark in the economy of Dubai and the real estate prices which were going around 20% of yearly increment has now gone down by 140% since 2012. The result is such the astronomical price of 2,450 USD per square foot has gone down to around 721 USD per square foot (Zeveloff, 2012). So the expensive building which was built with overrun budget of around 1.5 Billion USD and that too has to face many labour strike and economic crisis has finally came to end and got inaugurated on January 4, 2010 with massive ceremony.

The organisation ‘Turner Constructions’ was doing the project management job for the building. Being the world’s tallest; no previous experience was available and none of the resources could provide some overview by studying the lessons learnt of previous such project. The  project management activity was poor which cause delay of the project by around nine months (Walid & Bowman, 2017). This consultant is the one of the renowned consultancy service provider in US. But in spite of having such good group, they failed to perform the risk analysis properly and the pre-execution checklist was not followed properly. The labour camp condition was not designed for such a big mass which has to come for the construction of the building, so proper mobilisation plan was not done.

Project Management Issues

A building is developed for residing people and of course such a massive building was built for such very rich people only. Everything the design, architectural view and all sorts of world records were the good side of the project. But the fault was in basic needs and necessity assessment and any mega project is built to suit the condition which has changed now. The bubble in the real estate buildings has already busted. The rates of the real estate building were as high as 2,450 USD per square foot and it has now gone as low as 721 USD per square foot. Whereas the estimated cost of the building has gone up from 875 Million USD to 1.5 Billion USD. So the cost analysis which was done prior to the start of the project and now the ground price is having a difference of hell and heaven. All projects are developed with an aim of earning; some are quick payback period and some with long, but overall in this case there is still a large between the revenue and expenditure has still remained.

One more criteria on which we can even analyse is the reasons for such delay and find the root cause to define better that whether this was a mess or a success. The delay caused in the project was around 9 months and it has faced the crisis and labour problem. But the root cause shall be discussed in the next section.

A project can be seen from many angles. Throughout the internet it can be found as a success story as such a large mega project could come out with positive message that in spite of the labour issues and economic crisis it could be built and finally operationalized. The issue were the cost got escalated due to extra add in scopes which were not envied since beginning and the crisis in labour might have also added to the cosy estimates. So it can be clearly identified that the  project management team has failed to estimate the total scope of work and the cost was so below estimated. The proper analyses of different criteria were not done before the start of the project.

Moreover we can see that there were around 9 months of delay in the completion schedule. This might have caused due to the issues we discussed in the literature review portion, where many subject experts has commented the root cause of the delay and one of them was the labour issue which has delayed the project and broke the morals of the labour too. The issue could have been averted by preplanning of the resource requirement. The scope itself was estimated wrong, so the resources too and the labour camp arrangement s were not adequate to accommodate such a huge labour requirement of around 40,000 at a time and were been recruited by Arabtech and esteemed construction organisation in Gulf countries. If the estimation by project management group had been done correctly, there would not been any differences in the scope of work and the resource mobilisation planning too. So due to poor project management work the project has to face a delay of 9 months and even the cost was escalated by around 100% to whooping 1.5 Billion USD.

Conclusion

So, if we look at it from the project management angle, it can be clearly seen that the project has failed in cost estimates. A project which has got 9 months of delay and cost overrun of around 100% can never be termed as success.

Conclusion

From the above study it can be concluded that the project Burj Khalifa was a massive construction which involved around 22 Million man-hours of work including the project management and other coordination activities and could be built with around 1.5 Billion USD with 9 months of delay. But the delays could have been averted except the one which was caused due to the economic crisis in Dubai. So if the project management activities would have been done well prior to the start of the project, then the loss and the time overrun could have been minimised to some extent. But the good point is even after having so many hard core issues the building could be completed and got inaugurated in January 2010. For a project, as maintaining the balance between the triple crisis that is the time cost and resources are important but also the completion is important otherwise the whole effort could have gone to waste. So the final outcome cannot be commented that whether it was a success or failure, because from project management point of view it has certainly got failed but from the angle of architecture it is a world class marvellous piece of work built by the king of Dubai.

If the project is to be done in future then the issues we discussed above shall not be repeated again. So the detailed risk analysis and scope planning should be done in advance so that the infrastructures can be made available from the beginning of the project itself. The mess which has occurred here with the labour camp can be averted and the cost overrun also could have been avoided except the impact of economic crisis. But for all such unknown unknowns the risk response reserve should be kept aside as management reserve which can help in such crisis period of the project life cycle and can keep the momentum going.

References

ArabianBusiness, 2017. Six years of success: 'The biggest challenge for the team behind Burj Khalifa was the fact it was working in unchartered territory'. [Online] Available at: https://www.arabianbusiness.com/six-years-of-success-the-biggest-challenge-for-team-behind-burj-khalifa-was-fact-it-was-working-in-unchartered-territory--617162.html [Accessed 8 September 2017].

Bartleby, 2013. Burj Khalifa - Success or Failure?: Project Management Perspective. [Online] Available at: https://www.bartleby.com/essay/Burj-Khalifa-Success-or-Failure-Project-Management-F3C86MEKVC [Accessed 8 September 2017].

DubaiCityGuide, 2010. Burj Khalifa Milestones. [Online] Dubai City Guide Available at: https://www.dubaicityguide.com/site/burj/milestones.asp [Accessed 8 September 2017].

Emaar PJSC, 2016. Facts & Figures. [Online] Burj Khalifa Available at: https://www.burjkhalifa.ae/en/the-tower/factsandfigures.aspx [Accessed 8 September 2017].

Israel, B., 2010. 10 Things You Didn't Know About the Burj Khalifa, the New Tallest Building in the World. [Online] Available at: https://blogs.discovermagazine.com/80beats/2010/01/04/10-things-you-didnt-know-about-the-burj-khalifa-the-new-tallest-building-in-the-world/#.WbNw93ThXIU [Accessed 8 September 2017].

Janela, M., 2014. 8 Burj Khalifa records for Skyscraper Day. [Online] Guinness World Records Available at: https://www.guinnessworldrecords.com/news/2014/9/8-burj-khalifa-records-for-skyscraper-day-59996 [Accessed 8 September 2017].

Oath Inc, 2010. Burj Khalifa: Dubai Opens World’s Tallest Building Amid Crisis (PHOTOS). [Online] Available at: https://www.huffingtonpost.com/2010/01/04/burj-dubai-dubai-opening-_n_410190.html [Accessed 8 September 2017].

Pile, T., 2017. The good, bad and ugly sides to Dubai. [Online] Available at: https://www.scmp.com/magazines/post-magazine/travel/article/2058979/good-bad-and-ugly-sides-dubai [Accessed 8 September 2017].

Reuters Staff, 2014. UAE, Abu Dhabi roll over $20 billion of Dubai's debt. [Online] Business News Available at: https://www.reuters.com/article/us-emirates-dubai-debt/uae-abu-dhabi-roll-over-20-billion-of-dubais-debt-idUSBREA2F0EQ20140316 [Accessed 8 September 2017].

Walid, T. & Bowman, D., 2017. Burj Dubai facing 9-month delay. [Online] Arabian Business Available at: https://www.arabianbusiness.com/burj-dubai-facing-9-month-delay-48582.html [Accessed 8 September 2017].

Zeveloff, J., 2012. Dubai's Burj Khalifa Is A Complete Flop With Buyers. [Online] Business Insider Inc. Available at: https://www.businessinsider.com/dubais-magnificent-burj-khalifa-is-a-complete-flop-with-buyers-2012-7?IR=T [Accessed 8 September 2017].

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