Project Arab Gulf aims to explore, capture & report about PM in the region. Hence, we are covering the development & implementation of the unique expansion program of Makkah, Saudi Arabia.
These projects aim to expand the city’s physical, social, cultural & business boundaries unlike before. The sponsors of this program are the government of Saudi Arabia, a usually private & conservative country. The stakeholders & customers include local, global experts & companies & the Earth’s entire Muslim population. The backdrop is challenges of extreme climatic conditions, landscape, culture & important religious implications.
In my last blog Makkah Expansion Projects, past, present & future – Part 1 we introduced the ancient City of Makkah, tracked the chronological expansion of the masjid and city surrounding the house of God ‘the kaaba’ and tabled the transformation and boom since 632AD. To date the Saudi authorities have established the future vision and the challenge has begun to deliver a sophisticated futuristic city fit to house, cater and exceed the expectations of the tens of millions of global religious visitors that visit yearly.
In the words of Prince Khaled Al Faisal present governor of Makkah province
The strategy we are adopting focuses on human and urban development. Our strategy originates primarily from the Kaaba, which is the basis of all development as the centre of Makkah.
Our dream for Makkah is taking shape. It is not a mirage in the desert or an outlandish aspiration, but a real, heart-pounding rhythm of progress seen and heard rising up from the sands.
Lucrative business and project propositions
More than SR100 billion is earmarked for the city’s development this is attracting companies and organizations from every sector, industry far and wide. The rewards are potential investment opportunities, profitable joint venture partnerships and access into this lucrative market.
Power, Water and Sewage companies are drawn to the many utility projects, whilst infrastructure companies bid for the development of Roads, Transportation including air and rail, Telecommunications, Education and Healthcare. Real Estate Developers tend to the Religious, Hospitality and Industrial needs of futuristic Makkah as do the Construction Companies, Equipment Manufacturers, Building Materials Suppliers, Architects, Urban Planners, Consulting Engineers, Contractors and Project Management providers.
Business case: Why does Makkah need to expand?
The most obvious reason is the global population increase of Muslims, reports place this population in 2011 at 1.8 billion, according the Pew Research Centre the Muslim population will increase by 74% between 2010 and 2030. All these Muslims are obliged by Islam to visit Makkah and perform the Hajj at least once in their lives. So proportionately as the Muslim population increases so will the number of pilgrims to Makkah!
To meet this demand the Saudi government has increased the number of visas for pilgrimage into the kingdom. Presently religious tourism contributes to 3.2% of the kingdom’s GDP but could rise to as much as 9%, says Abdullah Al-Juhani, vice president of the Saudi Commission for Tourism and Antiquities, http://bit.ly/lUTir8. Only in Makkah hotel occupancy rates rise by 200% at high season this is the situation at present as demand outstrips supply driving prices through the roof, even at extortionate prices hotels are full.
Increase of pilgrims can also be attributed to better and wider choice of transportation and international flight connections, increased affordability and a younger more sophisticated demography of Muslims. Political instability in Muslim countries has also created more movement towards the kingdom.
Clearly there is a huge market demand for residential properties, hotels and infrastructure. As well as customer services and needs for all the services to accommodate and cater for year round religious tourists.
Challenges facing this ambitious program of expansion
Modernity, expansion and change on this scale in a closed and conservative country is risky and will raise many negative and positive issues. As the overall delegated authority for this program the Makkah Development Authority is tasked to plan, manage and control all the challenges. Below are just some of the factors that need to be dealt with.
• Prioritisation of projects, sectors and geographic locations
The Makkah Development Authority holds the development master plan and makes the decisions as to which regions and sectors of Makkah are prioritised for immediate spending. Part of its plan is also to reinforce local, regional and national backing for these ambitious projects by announcing upcoming projects and propagating the social and economic benefits for Makkah to all stakeholders. Via research and analysis the authority’s plan is to link the impact of this modernisation to local and national economic growth in the kingdom.
• Expensive real estate Complex land deeds, ownership challenges
A local Saudi paper recently estimated land costs at $133,000 per sq meter.
“This is the one place in the world where land is so expensive. Land in Makkah, especially close to the
Grand Mosque, has become more precious than gold and diamonds,”
Saudi real estate investor Ahmad Al-Ghamdi told Arab News.
Professionals on the ground and close to the project report that 90% of the Makkah inhabitants were forced to evacuate their homes to make way for the new developments. Many who were in possession of legal ownership deeds, registration and legalities were reimbursed more than satisfactorily. Others with unauthorized land or other ownership issues caused delays to the public and private projects that depend on these legal land acquisition formalities to complete.
• Demolition and topography challenges prior to construction
Projects to demolish and clear disorganized neighborhoods and dilapidated buildings are still ongoing and are required to be executed with precision and minimum disruption to the millions of pilgrims within close proximity. Some of the challenges in this phase include vehicle and machinery access to buildings on steep mountain slopes, in many instances manual labor and donkeys had to be used as alternatives posing cost and risk issues.
Prior to building new infrastructures such as tunnels, roads and high-rise buildings mandatory research and feasibility has to be completed to plan the reshaping and stabilizing of Makah’s mountains.
Other considerations are costs of construction due to the topography of the area. The many constraints, requirements, type and size of equipment needed as well as construction techniques and project time durations all contribute to cost increases. One source mentioned 20-30% additional contingency to cost baselines to cover unknowns. Further more companies are adding padding to time estimates to allow for import of supplies, resource and other dependencies.
• Need for consistent and transparent government information
In order to expand Makah’s religious hospitality market to the world, there is a need for a department to gather and process open and transparent information on visitor volumes, predicted future numbers, visitor profiles, distribution and spending patterns. Basic figures such as visitor numbers in the last ten years were not up to date and we were unable to contact the departments or persons responsible for this information.
Outstanding questions & considerations
There are a great many questions that require answers such as how project management processes are being applied, how risk, quality and human resource challenges are being addressed and who and where lessons learnt will be gathered.
The following is a list of other factors that have not been publicly highlighted and for which no information exists:
• Air Quality and Environmental Impact of demolition, reshaping, tunnel building and construction of mountains
• The short, medium and long term environmental impact of increased refuse, sewage, fumes, traffic etc. on Makkah
• Human Traffic Management
• Emergency Evacuation procedures
• Procedures for identifying and processing illegal immigrants and Visa over stayers
• Preserving the religious heritage and culture of Makkah
• Sanitation and Disease control studies and strategies for the city
• Making the Kaaba accessible to projected pilgrim numbers exceeding15million – crowd control
• Human resource constraints as workforce entering Makkah can only be Muslim.
• Enabling jobs, training and opportunities for the local Saudi population
• Keeping the masjid surrounding the Kaaba peaceful and free from becoming politicised.
• Studies on the effect of hot weather on the performance of the materials and productivity of human labor and machinery.
Project Arab Gulf, wish list & recommendations
In the interest of promoting best practices and knowledge sharing, this program as a case study is valuable to the profession of project management. We would love to hear from more professionals close to these projects.
Project Arab Gulf has contacted Saudi giants Bin Ladin Group and Saudi Oger to understand reasons why they terminated their contracts with the Makkah Development Company. We are hopeful that we will get a response to our questions.
We urge authorities to establish a “construction research center” in Saudi Arabia for data collection, analysis and documentation of projects. Also, as a center to create and promote good standards and practices in the region.
There should be comprehensive government led research and analysis on how the months of Hajji and Ramadan positively and negatively affect construction, environment, projects and other factors in Makkah.
We strongly recommend the set up or propagation of a central PMO type organisation with information, lessons learnt and document repository covering all the projects. This will benefit the region in understanding construction costs, risks and other planning considerations. It should house a department responsible for quality assurance and control of construction practices in the city, process improvement and safety standards.