The Gulf Cooperation Council (GCC) region is witnessing an unprecedented surge in the delivery of mega programs—ambitious construction projects that not only define skylines but also carry significant financial and project management risks. In a recent article by Marwan Bejjani, Susie Almasi, and Elias Karam from Strategy&, eight critical success factors have been identified to optimize the execution of these mega programs.
The Importance of Mega Programs in the GCC
For over three decades, GCC governments have effectively leveraged mega programs as a means to diversify and expand their economies. Iconic projects, such as the industrial port cities of Yanbu and Jubail in Saudi Arabia, and the development of downtown Dubai anchored by the Burj Khalifa, have transformed landscapes into vibrant living, working, and recreational spaces. As of early 2020, nearly 30 mega programs were in the pipeline, with an estimated investment of around $1 trillion, accounting for almost half of the region’s $2.3 trillion construction pipeline. These initiatives range from urban regeneration projects to expansive smart city developments.
Challenges in Delivering Mega Programs
Despite their potential, mega programs are inherently complex and magnify common challenges faced in construction. These include:
- A fragmented and non-localized value chain
- Limited integration of digital tools and technologies
- A shortage of adequately skilled workforce
- Insufficient planning
- Complex governance structures
- Outdated regulatory frameworks
Given the fragility of the economic environment, government funding for these initiatives may be constrained, heightening the stakes associated with time and cost overruns. The consequences of failure in a mega program far exceed those of standard construction projects, necessitating a disciplined approach.
To navigate these challenges, GCC nations are encouraged to capitalize on the ongoing transformation within the construction sector, which includes advancements in industrialization, professionalization, digitization, and consolidation.
Eight Priorities for Success
For stakeholders—including owners, investors, regulators, and suppliers—to enhance the delivery of mega programs, they should focus on the following eight priorities:
- Strategic Planning
At the onset, a clear mega program strategy must be developed. This strategy should determine whether the project will be a self-development initiative, a private sector partnership, or a hybrid approach. A self-development model necessitates the most efficient design-build framework. Conscious decisions regarding project management and design models (e.g., modular versus traditional) will influence material selection, construction complexity, and operational dynamics. - Next-Generation Materials
Embracing industrialized construction methods and next-generation materials is essential. Transitioning from labor-intensive processes to prefabricated, “productized” components enhances efficiency. Incorporating innovative materials early in the design phase fosters economies of scale in terms of durability, performance, cost-effectiveness, and environmental sustainability. - Strategic Sourcing
Strategic and resilient sourcing of inputs is vital. Centralized and holistic sourcing across a mega program enhances value and security within the supply chain, especially in managing disruptions. Increasing localization in construction material supply chains can lead to more efficient and robust sourcing practices, moving away from the traditional project-specific procurement focused solely on cost. - Governance Structure
Establishing a fit-for-purpose governance and operating model is critical for successful project delivery. This includes implementing a standardized stage-gate process, governance committees, and a well-defined operating organization. A balance must be struck between necessary checks and balances and minimizing bureaucratic inefficiencies. - Centers of Excellence
In-house centers of excellence are essential for sharing knowledge and ensuring compliance with technical standards. These centers define policies, set standards, research innovations, and manage supplier relationships, all while developing talent within the organization. - Digitization
Pursuing digitization from the inception of mega programs enables transparent, data-driven decision-making. Technologies such as Building Information Modeling (BIM) create 3D representations of projects, allowing stakeholders to anticipate and address construction challenges effectively. - Talent Acquisition
Attracting the right talent is crucial. Project owners should consider job families that require a mix of white-collar positions (e.g., project management, engineering) and skilled blue-collar roles, which are evolving with the shift towards industrialized construction methods. - Environmental, Social, and Governance (ESG) Standards
ESG considerations should be integrated into the fabric of mega program development, rather than treated as an afterthought. This involves making intentional trade-offs regarding cost, quality, and livability, while prioritizing features such as access to green spaces, carbon neutrality, and integrated live-work-play environments.
Conclusion
By focusing on these eight success factors, GCC countries can not only enhance the delivery of their mega programs but also position themselves as leaders in the global construction landscape. The ongoing transformation in the industry presents a unique opportunity to achieve these ambitious goals within a decade, ultimately shaping the future of urban development in the region.
