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Candidate Number: STWD7

BENVGTC9

Critical Debates in Planning

Topic 4: Mega Project

Tutor: Professor Harry Dimitriou

How is/ should the ‘success’ of mega-

projects be measured?

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Introduction:

Mega-projects are as old as antiquity, at least as old as the pyramids of Giza. Which begs the

question, did the ancient Egyptians consider them a success, and if so under what criteria?

From whose perspective: the rulers buried in them, or the slaves who built them? From

today’s standpoint, the fact that more than thirty centuries later they are still boosting Egypt’s

economy is surely an incredible achievement. But given they were designed to protect the

sanctity of the deceased for eternity, the Kings and Queens who ordered and paid for the

pyramids might consider them a failure.

Success comes in many forms and judging it is subjective. Motivations for mega-projects

vary according to the political, economic and social context that gives birth to them, and this

essay will argue their success should be judged accordingly. Specifically, success criteria

should be framed according to the benefit they bring to the community over the long term

(although in decades rather than centuries). To illustrate the point, I will focus analysis on

one city: London, and one mega-project: the 2012 Olympic Games.

The main reason for hosting this expensive event was to turn around a failing part of the city,

and in doing so, rebrand the whole of London. Examining its success begs the question of

whether there could have been a better, simpler way. The answer, in theory, must be yes:

hosting a two-week sporting event cannot be the best way of creating lasting employment in

an area recovering from the decline of its traditional industry. This in turn begs the question

of why mega-projects have become the preferred method of addressing industrial decline.

Drawing on the vast literature, the essay will attempt to explain the current vogue for mega-

projects. It will look at the role Olympic-related developments are expected to play in

regenerating the East End of London, both in official discourse and critical expectations. It

will also examine the experience of other Olympic projects and nearby regeneration schemes

at Canary Wharf and the Millennium Dome. Finally, it will name the criteria upon which the

Olympics 2012 should be judged.

What is a mega-project?

Orueta and Fainstein say there are two main types of mega-project: "one based on

construction of a huge edifice with strong symbolic significance... and on the other, a larger

scheme with complex contents" (2009:pg760). This can range from transport infrastructure

such as high-speed rail links, bridges and tunnels to urban regeneration projects, retail

complexes and iconic buildings. The Olympics is also a mega-event, which Poynter

(2009:pg133) describes as a large-scale undertaking “organised by a social elite” which

represents “a populist cultural expression of the achievements of the host city or nation."

Mega-projects share some common features. They are often located in urban areas or regions

(Dimitriou 2010), and by their nature are expensive and all too often over-budget (Flyvbjerg

2003:pg6). The 2012 event will cost at least £9.3 billion, an increase of £5.9 billion from the

original budget (Saunders 2007:pg9). Mega-projects are also risky, particularly when an

inflexible timescale is involved, meaning contractors can hold the organisers to ransom if

deadlines slip. Some Games have been profitable – the Los Angeles Games of 1984 being the

most cited example, thanks to corporate sponsorship, television revenues and spending

controls (Roche 2000Lpg153) – although many have left authorities debt-ridden.

Nonetheless, few organisations have enough resources to fund such schemes or the stomach

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to carry the risk involved, meaning the state is often involved. This can take the form of tax

incentives, regulatory holidays, subsidies, or public-private partnerships, of which there has

been much criticism.

In Vogue

Yet for all their detractors, mega-projects are very much in vogue. One reason may be that

city authorities see them as the best means of galvanising significant funds from cash-

strapped central governments. In this time of budget cuts, the Olympic area must be glad the

central government can’t back out of their 2012 spending commitments.

London is also looking forward to the attention. The Olympics brings a certain prestige, with

millions expected to watch the games on television (no doubt the reason the marathon route

was changed away from the gritty East End to take in famous London landmarks). Global

competition pits city authorities against each other to attract investment, professionals and

tourists. As Tallon, Cochrane, Garcia and others have noted, culture is seen as a tool for

achieving this. There may also be a certain amount of delusion and/or hope involved: “as if

the power of imagination, plus property development and architectural style, is assumed to be

enough to transform what used to be accepted as the stubborn realities of urban-industrial

decline” (Cochrane 2006:pg116).

For some, mega-projects might be a Keynesian way of spurring the economy by injecting

funds. Or it could be the exact opposite: Gualini (2007:pg298) sees it marking “a shift from

redistributive policies towards more market oriented approaches aimed at economic

development and inter-urban competition." On a local level, the argument can be framed to

harness whichever ideology most suits the authority holding the purse strings. In the end,

mega-projects are an effective way of ensuring large sums of money are spent.

The politics of mega-projects

In their study of a range of transport mega-projects in different countries, Dimitriou et al.

(2009) note that politics and lobbying impact all aspects of the project, including the decision

to go ahead. Mega projects are often "revealing window on patterns of influence in urban

development politics” (Altshuler 2003:pg4) as different interest groups battle against what

are threats for some or in favour of what are opportunities for others. Molotoch’s argument

that elites compete with other elites for growth-inducing resources, helped by favourable

politicians (1976:pg309) can be expanded further with politicians pandered to by consultants,

whose eyes are on future contracts. Against them, residents may join forces with green

organisations and radical groups who oppose development, each for their own reasons, as

well as land owners, who may ostensibly object as they hold out for maximum compensation

(Rothengatter 2008:pg230).

Different interest groups have different motivations. The proposed high speed rail connection

between London and the Midlands is eagerly anticipated by some in Birmingham and places

which expect to benefit from plugging into the growth of the South East, and opposed by

places such as Oxfordshire, who see only disruption and expense. Whether the project goes

ahead, and how it goes ahead, will reflect the political and economic strengths and

weaknesses of the different parties involved.

The management of mega-projects

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Many an interested party, however, has come to rue the day they argued in favour of mega-

projects, which often prove very hard to manage, attracting much criticism. The reasons for

failure are manifold. Rothengatter (2008:pg217) lists five, including a public procurement

process that rewards appraisal optimism; estimates that don't account for risk; different

methodologies used by the public and private bodies involved; vested interests leading to

bias; and rigid schemes that don’t react to unplanned changes. This suggests that failure is

due to bad management, and success would come if the incentives were organised to reward

correct behaviour. There may be some truth to this, but Rothengatter’s solutions do not go far

enough.

Traditionally, project success depends on delivering to scope, in budget and on schedule, but

given the mega nature of mega-projects, these may be minor concerns in the bigger scheme

of things. Morris (1994:pgxvii) says the way projects are set up and defined needs to be

changed, affecting the way we judge success. While being able to deliver the Olympics

Games on time is clearly crucial for London’s image (Delhi’s almost failure to be ready for

the Commonwealth Games has severely dented India’s credibility), the regeneration part may

take longer than anyone is letting on. Management timescales and success criteria should

therefore be re-set for the long-term, with media handling strategies in place to deal with the

higher attention the project will attract in the short term.

Lessons

Andranovich analysed the Olympic Games of Los Angeles, Atlanta and Salt Lake and

concluded that despite the benefits there are “'serious public policy concerns, particularly

with respect to the role of access, accountability, and responsiveness” (2001:pg127). This

analysis follows the bad management school of thought assessed above. Perhaps more

relevant for the 2012 Games given the regeneration objective, is the experience of previous

attempts to regenerate this part of London.

Many lessons can be learnt from the fiasco that was the Millennium Dome. One in particular

is relevant here: poor management of the event overshadowed the more important legacy

gains. McGuigan and Gray (both 2003) describe appalling lapses of judgement that quite

rightly grabbed media attention, but that have sullied the image of the project which

transformed a once derelict piece of land to the busiest music venue in the world (although at

what cost?). Also transformed is the Isle of Dogs, thanks to the Canary Wharf development,

whose towers of finance now dominate the East End. The statistics for the area show

increased affluence, but mostly because rich people have been attracted to the area: on a

micro level communities remain “starkly divided both physically and socially” (Carmona

2009:pg62-65). Tackling the social problems of the area was never a stated goal of the

privately-funded scheme, and thus the failure to significantly improve conditions for locals is

perhaps not surprising. Carmona, however, is optimistic. He says the trickle down is working

“but very slowly indeed.” This means from a regeneration perspective, “35 years is just too

soon to judge.”

The aims of 2012

Benefits from the Olympic developments should arrive more rapidly, as legacy has been from

the outset London’s “top priority.” (http://www.london.gov.uk/blog/why-london-olympics-

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mean-business). These will include environmental improvements from the creation of the

Olympic park, and the expansion of the housing stock and the provision of new public

amenities. Benefits will spread beyond the Olympic site, with the Games a catalyst for a

major shopping centre in Stratford and investment in the Royal Docks (Vandore 2011). Not

to mention the much touted benefits of showcasing the best of London during three weeks of

global media coverage.

The risks for an impoverished area such as East London is that increased house prices means

locals are pushed out and/or lack the skills to take advantage of the new employment

opportunities. It is by no means clear what way the trickle-down effects will trickle, and the

authorities lack a clear strategy for directing the flow. This is perhaps because no one really

knows how things will work out: much will depend on whether the Olympic Park Legacy

Company manages to sell facilities such as the Media centre, and who to. The GLA

(2010:pg2) has made several recommendations to the OPLC such as ensuring the media

centre provides “a large number of skilled jobs” and community access to those facilities –

but the recommendations are non-binding.

In 2008, the think tank NEF produced a 10-point plan to ensure the maximum investment

stays in the local community. This includes stipulating that community benefit is a required

outcome in contracts; breaking down contracts so smaller companies have the chance to bid

for parts of them; monitoring the percentage of local companies and local people employed;

including community groups in decision making bodies; and ensuring facilities are later

transferred to a community development trust.

This works for judging the immediate success of the Olympics. But it doesn’t help as much

when it comes to judging the legacy, which is supposed to be the main objective.

Conclusion

Given that regeneration of the East End was an explicitly stated objective of the Olympic bid,

it makes sense for it to be a criterion of success. The whole country will benefit if the East

End is transformed from a place that sucks in public subsidy to a place that gives wealth

back, and the change will help rebrand London.

Regeneration is of course difficult to measure, and so specific criteria must be set. Useful

ones would include a reduction in long-term unemployed and benefit claimants, or an

increase in business revenue (particularly from smaller companies). In addition, to ensure

public money has not been wasted, care should be taken to avoid a repeat of the 2004 Athens

Olympics, where many facilities are now unused. Taxpayers should also benefit so public

access to facilities should be measured. As regeneration is a process, it should be judged over

the longer term, with five, ten, twenty and even fifty year objectives.

Although local community benefits are not always an explicit aim, this essay argues for their

adoption as a success criteria for mega-projects in general. Rather than being overly focused

on narrow project management criteria such as traffic numbers, planners would do well

widen the scope of the factors they take into consideration, for example the benefits to the

wider economy and business of improving connections across the country. The benefits

considered important will vary from project to project, and from community to community,

and so care should be taken that the criteria are not manipulated in favour of vested interests.

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But that should not detract from the aim of trying to ensure multi-million pound projects

serve ordinary people and not just consultants, developers, large companies and politicians.

Word count: 2193

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