One of the most frequent questions I am asked is what is happening in
Then when will all this construction be finished and is it all happening within the time frame that we anticipated?
Here there are a few issues that need to be clearly understood. If you believe the media hype then good for you, in the real world there is a great deal of engineering needed from planning infrastructure all the way up to the build and completion of these projects. You cannot cut and paste a building from the drawing board on the site, (wish it was that easy). The challenge for these projects is the following:
- Infrastructure: Indeed there is a lot that has been said about this, but from where I sit there is no doubt that the infrastructure capacity exists for the development underway. The issue is getting that infrastructure out to the different and diverse range of projects that are out there. In one sense a large format framework plan has to be agreed with the utility companies covering the next 10 odd years and then projects should be announced.
- Phasing: When projects are announced the PR machine makes it sound like everything will be built in two to three years, when in reality the project plan is phased over 10 odd years. The result is a set of expectations in the marketplace which are out of sync from the reality from day one.
- Capacity: If I was to take all the projects announced as of today and plot them against the resource capacity currently available there is no way these projects can be completed within even 5 years. Only those projects who have contracted the resources and locked in the prices have a decent chance to be completed on time.
What this does imply is that over the next few years a number of projects will have to be realistic about their completion schedules and by the sheer weight of market force adjust to this reality. A prominent contractor told me just last week that with all that is planned and under construction the resources do not exist to put it all together in this time frame. When I asked how many more resources are needed, his crisp response was that it would mean tripling the labor force, doubling the plant and equipment and most important have a robust supply chain for building materials that can sustain the build process for a 4 to 5 years building spree.
This is not an easy process especially considering that planners keep announcing new projects which are adding to the pile of ‘to do’ list. There is a way to do all this faster but it will mean compromising on the quality and the delivered product and perhaps in some cases this might already be happening. What is essential to consider is the construction management and the people putting the whole process together. I have seen people with no experience of construction trying to develop very complex and difficult projects with project management budgets that just do not make sense. The end result will be delays as mistakes will be made during the build process.
Looking ahead I do believe that developers will be more realistic about the completion schedules of their projects. I also suspect that developers will announce a wider phasing plan for the projects and confirm completion dates once the project has gone into post contract phase.