Project Success
Project Success is defined as adherence to budget, schedule, function (performance), and client satisfaction. To determine whether the Masdar City site was a success it is important to evaluate what the goals of the project were, if it succeeded at them and if it met the criteria above.
The goal was to test the possibility of a self-sustaining zero-carbon city, running entirely on renewable energy resources, and prepare the United Arab Emirates, at the moment reliant on oil sales, for the future (Masdar City, Abu Dhabi, n.d.).
In the wake of the financial crisis, the completion date was pushed from 2016, which saw only one-third of the initial goals completed, first to 2025, and then to 2030. With the current technology, the goal of zero carbon was replaced by low carbon. The design of the city has the potential to fulfill its promises, with the planning accommodating for a “green” lifestyle. However, testing has shown that the goals can be achieved only through strict regulation of energy consumption and lifestyles of the residents, which will be much harder to accomplish once real inhabitants move it (Walsh, 2011). On the other hand, the delay has seen a change in the budget from the original $22 billion to $19.8 billion (Stanton, 2010).
At the moment, t is hard to say if the Masdar City project is a success or a failure. There are already diversions from original goals. But even if the goal of a self-sustainable zero-carbon city will not be met, the project will still provide abundant research results in similar future endeavors and is set to become the major testing ground for all new “green” technology. The UAE proves that they are determined to prepare for the day when the oil runs out.
Financial Feasibility Estimation Techniques
The Masdar City is a unique project and a lot of inherent uncertainty in the application of new technologies and design choices. This creates difficulties when choosing the appropriate Estimation techniques to evaluate its financial feasibility.
Since the project has numerous aspects, consisting not only of construction but also of the introduction of new materials and new technologies, it would require a combination of several different Estimation techniques to be used to achieve the most accurate result (O’Halloran, 2013).
Since the aim of the UAE was to create the first zero carbon self-sustaining city of its kind, applying the technique of Analogous Estimation is not feasible in this situation, for lack preceding similar projects of the same scale. For the same reason, Expert Judgment would be less efficient in this situation.
For buildings, solar panels, windmills, electric cars, and other similar objects manufactured or purchased in bulk it would be a good idea to employ Parametric Estimation. For example, provided that a price of a single “green” house, equipped with solar panels, and furnished with all essential facilities, is known, estimating the costs of the total number of scheduled housing should be possible. For less defined expenses, like the development of new technologies or systems, the Bottom-Up Estimating would work best. This technique takes individual portions of the work and estimates the costs of its components.
Finally, evaluating the feasibility of the whole project would require the use of the Three-Point Estimate. This system takes the best case costs, the most likely costs and the worst case costs, totals them in the ratio 1:4:1, and divides them by 6 to achieve an estimate. Of course, even this estimation will need to have the uncertainty accounted for.
The Dulhasti Power Plant Case Study
Budget contingencies
The Dulhasti Power Plant is an example of one of the most devastating failures in project cost estimation and delivery. The project was started in 1983, in the Indian provinces of Jammu and Kashmir, and had an initial cost estimate of $40 million dollars. By the time it was finally finished in 2008, the estimated total cost of the project was near $1.1 billion dollars (Dul Hasti Dam and Hydroelectric Power Project, n.d.).
The Indian government awarded the construction rights to a French consortium. From the beginning, it demanded a bigger price revision but was turned down and forced to accept an even lower offer to avoid losing the contract. This only made the relationship between the government and the consortium more complicated, and, in the end, cost the country about a million more then they aimed to save.
The construction was located in a heavily disputed area between the Pakistan and India, which was an easy target for terrorist attacks and lacked any infrastructure or a sufficient logistics network necessary. The Indian government also had to rebid the contract to a Norwegian team after the French ultimately refused and lost more money in the process.
It is clear that the Indian government did not take security and logistics into account in their original cost estimations, something that created a massive costs bloat over the course of 24 years of construction. It also did not factor the difficult geographical location of the site, as well as the tense political situation in the region. Since the government attempted to save money by awarding the construction rights at a fixed contract to the lowest bidder, the project had no space left for cost contingency planning (Project cost contingency, 2014). Ultimately, while I believe that contingency planning could have helped avoid some of the expenses, there was also a gross miscalculation in other fields. At the very beginning, the project needed to be re-estimated for cost and feasibility before creating contingencies.
References
Dul Hasti Dam and Hydroelectric Power Project. (n.d.). Web.
Masdar City, Abu Dhabi. (n.d.). Web.
O’Halloran, C. (2013). Improving Project Estimation Accuracy. Web.
Project cost contingency. (2014). Broadleaf. Web.
Stanton, C. (2010). Masdar City completion pushed back, but total cost falls. The National. Web.
Walsh, B. (2011). Masdar City: The World’s Greenest City? Time. Web.