Tremendous growth in the world, particularly in Asia-Pacific and Middle East-North Africa (MENA), is driving a new era of “mega projects.” Mega projects are large scale projects generally valued over $1 billion, which are so great in impact that new business communities and infrastructure must be created and national economies may be influenced by their degree of success. Success requires enmeshing complex, concurrent project efforts with local, regional and national socioeconomic, cultural and community dynamics.
Understanding how to execute mega projects is a challenge for project owners, executives, employees, community leaders and policy makers as well as local business communities and entire global value chains supporting a project. All need to comprehend what a mega project involves and how best to make their contribution.
Not since the energy price-sponsored surge in mega projects in the late 1970’s and early 1980’s, have we seen such a high level of activity that requires an appreciation for the mega project landscape. While project management tools have improved over the years, there is a new generation of technology from outside the project management field that can be tapped for this next opportunity. More importantly, the human experience in leading and facilitating mega projects needs to be grasped for projects to succeed. Much preparation and training is demanded.
In the book titled “Command Centers in Mega Projects – Project Orchestration” authored by the above writers, it says that in today’s mega projects, no society can ignore participating in the growth emerging from the Mid East to the Pacific as the efforts under way will reshape project management and the fruits of the projects will impact major markets. “That is, where development, manufacturing and distribution take place, what technologies and related products and services are pursued and the level of purchasing power for consuming societies. Any firm with truly global aspirations needs to at least track, if not actively participate, in the new mega project era,” the writers said.
The question of technology use extends beyond project management.
Projects will have the opportunity to reject inventory-based legacy systems that in the past have been imposed on developing nations and carried on the next generation. The scope of investment and the length of the mega project can foster adaptive design along with new methodology that is tested and demonstrated, ready for use by the time of project turnover to operators. To stabilize projects and increase the chances of success, project life is being extended in contrast to the 1980’s when so many mega projects were left undone.
If investment projects are used to leverage the creation of new technology community repair, one should consider technology in situ, among others, to process operations that clean blockages that effect repair and maintenance in the aforementioned timely repair.
Besides, command centers that lay out the landscape of the project for rapid deployment of solutions by all levels, alerted and engaged by mobile computing and may transfer to the new facility plus a new era of logistics for global markets that leverages new infrastructure to create optimal transport solutions, should be taken into consideration.
Another important factor is distant learning solutions grounded in eduentertainment that expedites learning for young people of the “Game Boy” generations and reinforces learning with online coaching on the job.
The project-based economic development has the potential of a dividend in technology development fostering local economic growth based on the new technology and expansion of global markets. Whether development, co-development or customer support to application, a new technology foundation may be created in the business communities of societies engaged in mega projects.
Not only are there substantial profits to be earned, the sheer mass of the undertaking will change the way engineering, procurement and construction (EPC) will be managed in the future. Lessons will be learned and best practices influenced. Project management as a discipline will change and with it the underlying financial, professional services and marketing models for project management.
In the last few years we have seen China anticipating growing energy demands to invest close to a $100 billion in projects in Africa, Asia and the Americas — all aimed to provide resources to an expanding economy.
An oil trader for one of China’s energy concerns revealed the country intends to secure as much oil, refined product and transport capability as possible. In transport for example, Chinese shipyards are building energy tankers for Venezuela and US partners to expand their reach in global markets.
The Asia-based investment is expected to continue at high levels for years. Already long-term projects such as port facilities and refineries are under way with Chinese sponsorship. China is also investing in coal at home and abroad. India has similar ambitions for its expanding economy though much of Indian’s growth is in knowledge-based industries of code development and customer service. Still the economic expansion fosters energy consumption and infrastructure development.
While energy is an important element of growth, it is not limited to energy and in fact energy earnings are sponsoring a new generation of industries in MENA and through MENA sponsorship and collaboration with the Organization of Islamic Conference (OIC) countries such as Sri Lanka, Pakistan, Malaysia, Indonesia, Brunei, the Philippines and more. China, for Saudi Arabia, is an important OIC member state.
Collaboration is under way on many projects, with recent visits by Custodian of the Two Holy Mosques King Abdullah and his commercial emissary to China, Dr. Abdullrahman Zamil, chairman of the multibillion-dollar Zamil Group. Mega projects will engender peaceful co-existence and embrace development for the more than a billion Muslims and the markets they serve and serve them around the world.
Wealth accumulation in the Middle East is anticipating the future when oil is less important, recognizing it may take a generation or more to build new industrial core competencies. Different from their surge in wealth for the 1970s, the present investment is diversified. To this end, hundreds of billions of dollars are to be dedicated. The challenge the Saudis are undertaking with such a concentration of mega projects and the diversity of objectives is likely to become a footprint replicated by other countries, from the Middle East to the Pacific.
The writers said that the Gulf Cooperation Council (GCC) countries are poised to invest $700 billion in the oil and gas sector, infrastructure and real estate projects in the next 3-4 years.
Between 2001-2006, GDP of GCC economies more than doubled in nominal terms to about $723 billion. In the last three years in particular, Gulf governments have used oil surpluses to augment their public spending with disproportionate increases in capital expenditure.
Infrastructure expenditures now seem to be leveling off though on a high plateau, they observed.
This indicates continued fiscal prudence. Thanks to the high oil prices and accumulating surpluses, Gulf governments will be able to maintain infrastructure spending at a high level for years to come. This is in contrast to the 1980s when a spike in spending around 1981 was followed by rapid fiscal contraction and the cancellation of many projects.
They saw much lower risk this time as project management skills have increased considerably, and the involvement of private sector will stimulate unsustainable ventures. Project implementation is likely to be stretched over longer periods.
(J. Garrett Ralls is the managing member of Ralls Consulting LLC, a strategy and organization consultancy in Santa Fe, New Mexico, USA).
