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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 projects main aims and objectives were to strengthen Dubais 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 Dubais international prestige and economic strategy.

Table of Contents

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 worlds largest and most ambitious project of its kind, involving over 25km2 of new land being created and extending Dubais 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 countrys 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 Dubais 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 Construction start Land reclamation target Construction completion target Total estimated cost Number of housing units Number of hotels on crescent 5.6km2 2001 Beginning 2004 2008 4 6 bn $ 4000 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 Completion time Total estimated cost1 Number of housing units2 Number of hotels on crescent The project time line is shown below: H=A1>=41#
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End 2003 2008 - 2010 12.3bn $ 8000 28

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FE=>3=4<#31G1>8?A14:# 1 http://www.2daydubai.com/pages/dubai-palm-jumeirah.php 2 http://www.telegraph.co.uk/property/3344183/Palm-before-a-storm.html

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 Islands 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 projects 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 Nakheels 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 projects 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
Project organisational structure during phase 3

Project organisational structure during phase 1&2

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

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.

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 Dubais 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.

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.

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].

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