PM World Journal Vol. III, Issue VI – June 2014 www.pmworldjournal.net
Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
Debunking the ‘While Elephant Project’ Myth By Okebugwu, Onyinyechi F. and Omajeh, Enoch Oghene-Mairo. Department of Project Management, Federal University of Technology, Owerri (FUTO), Nigeria
ABSTRACT Everything that a term classifies should have similar features and characteristics, yet it is observed that what have been termed white elephant projects by people have very differing characteristics. This paper aims to show that there is an error constantly made in the definition of white elephant projects. It uses a literature review to establish that there are two descriptors in the term “white elephant project”, which are: (i) white elephant and (ii) project; and that for anything to qualify as a white elephant project, it must meet the descriptors (i) and (ii), that is, it must be a white elephant and must also be a project. An analysis of certain undertakings that have famously been termed white elephant projects was done. The analysis revealed that not all of them met (i) and (ii). Thus, not all of them are correctly white elephant projects. Those not meeting (i) and (ii) have erroneously been called white elephant projects. This paper then proffers a correct definition for “white elephant projects”. Keywords: Project, White elephant, White elephant projects, Project phase, Operations phase 1.0 INTRODUCTION Over the years, what scholars and researchers have termed ‘white elephant projects’ have very differing characteristics. The following four examples illustrate this. 1. In 2012, the Nigerian Aviation Minister proposed to set up cities (Aerotropolis) in some airports in the country, and a leading Newspaper in the country ran the caption ‘Nigeria: Airport Cities as White Elephant Project’ (The Nigeria Sun, October 7, 2012). 2. In 2013, Bayelsa State (in Nigeria) Governor deposited a mobilization fee of N3 billion to the management of a construction company for two flyover bridges to be constructed in Yenegoa, the state capital. In response to the news, SaharaReporters (February 16, 2013) reported that ‘Bayelsa state embarks on N15.6 billion white elephant flyover projects’. 3. After the commencement of construction works in the Lekki Airport (in Lagos, Nigeria), a Nigerian online discussion forum ran the topic “Lekki Airport: White Elephant Project?” A number of responders gave varying reasons why they felt it was a White Elephant project (Nairaland, 2009).
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PM World Journal Vol. III, Issue VI – June 2014 www.pmworldjournal.net
Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
4. Wikipedia listed the Capetown stadium that was built for the World Cup in South Africa as an example of “some allegedly White Elephant Projects” (Wikipedia, 2013) The first example was still just a proposal; in the second example, execution work was yet to commence; in the third example, execution work was on-going; and in the last example, execution work has long been completed. Given that these undertakings have very differing characteristics, should they all be classified by the single term ‘white elephant project’? What sets of criteria should an undertaking meet to be correctly called a White Elephant Project? 2.0 LITERATURE REVIEW The term derives from the sacred white elephant kept by monarchs in Laos. Keeping a white elephant was a very expensive undertaking, since the owner has to provide the elephant with special food (Martin, 2013). Receiving a gift of a white elephant was simultaneously both a blessing and a curse. A blessing because the animal was considered sacred and receiving it as a gift was a sign of being favoured; and a curse because the animal has to be retained and could not be put to much practical use, but would cost a significant amount to maintain (Wikipaedia, 2013). 2.1 WHITE ELEPHANT A white elephant can be defined as a burdensome possession creating more trouble than it is worth (Martin, 2013). It is used usually to refer to valuable but burdensome possession of which its owner cannot dispose and whose cost (particularly cost of upkeep) is out of proportion to its usefulness or worth. The American Heritage Dictionary of the English Language (2000) defines a white elephant as a rare, expensive possession that is a financial burden to maintain. The preceding show that a white elephant is any object, facility, scheme, business, venture etc that is expensive to possess, burdensome to keep, expensive to maintain, considered a conspicuous failure in terms of meeting intended performance, and yet difficult to dispose-off considering the cost implications of disposing it. A white elephant have the following main characteristics: i. ii. iii.
High cost of possessing Failure to reach expectations (low performance) High cost of maintenance/ support
Robinson and Torvik (1995) in their work defined white elephants as investments projects with negative social surpluses. They added that the construction of white elephants is a misallocation of investments, leading to a situation where there is heavy investments but the investments growth do not lead to output growth
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PM World Journal Vol. III, Issue VI – June 2014 www.pmworldjournal.net
Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
2.2 PROJECT On the other hand, Ntamere (1988) defined a project as a one short-term, limited, goal oriented major undertaking, requiring the commitment of varied skills and resources. He added that it is the co-ordination of human and non-human resources pulled together in a temporary organization to achieve a specified purpose since it has a single set of objectives. And when the objectives are achieved, the project is completed. Another specialist contributed that a project usually contains cost and time schedules to produce a specified product. It is characterized by a definite life span, defined objectives, unique and non-repetitive endeavour, and it cut across organizational and functional lines (Onwusonye, 2005). A project is characterized by the following: i. ii. iii. iv.
Goal oriented – it is conceived and executed to achieve certain objectives Uniqueness – it brings about a product/ service that was not in existence Constrained – the limited nature of resources affect its execution Temporary – it have a definite beginning and a definite end
While the various characteristics of a project as listed above are important in every project; this work explores the temporary nature of a project, because the authors perceive that it is a lack of understanding of this characteristic of a project that have led to the error in the definition of a white elephant project. Chitkara (2011) alluded to the fact that project organization is temporary. That a project is temporary means that it has a lifespan, that is, a time when it starts and a time when it ends. A project is not on-going neither is it repetitive. When it is completed and determined to meet all specifications, resources are released, and its main deliverable is then handed over to the client. Acceptance of the deliverable signals the end of the project. A project aims at accomplishing an objective like creating a product, service or a specified outcome. The project objective is to create a facility within specified constraints. The term facility as used includes product, service or a specified outcome, which is the end result of the project. Each project has a specified mission or purpose to be achieved. It ceases after the mission is achieved (Chitkara, 2011). Future routine activities on the facility like its operation and regular maintenance is not part of the project that produced the facility. 2.3 THE REASON FOR THE ERROR The error made in defining “white elephant projects” stems from a poor understanding of the definition of a project. This also results in a lack of understanding of the clear distinction between the “project phase” and “operations phase”. That is, there is a clear boundary between a project and the operation of the project’s main deliverable. A project must end, and commissioned (in some cases) before the operation of the project deliverable will begin. These are two distinct phases. The inability to see them as two different phases has been the cause of the error in the definition of a white elephant project.
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Debunking the ‘While Elephant Project’ Myth by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
Featured Paper
In the project phase, the successful execution of the project is the responsibility of project management; while in the operations phase, the successful operation of the facility is the responsibility of facility/ operations management. If project management is effective, successful projects will be delivered and handed over for operations. If facility management fails to deliver required services, it does not take anything away from the effectiveness of the project management or the success of the project. That a project is successful does not mean that the operation of its deliverable (facility) will also be successful. And that such operations fall short of success does not take anything away from the successful status of the project especially where it had met every specification, duly handed over, accepted and commissioned. But when the separateness of the two phases is not recognized, a failure of the facility management to deliver required products or service will be erroneously seen as a failure of the whole system, and the facility will be called a white elephant project. But in reality, the project that delivered the facility had not failed. Drawing an analogy from the stages in the development of a human life will help to illustrate the separateness of the two stages.
Planning Execution Closing
Foetal development phase
Project phase
Conceptualization
Operations phase
Take-Off Operations Maintenance
zygote Foetus
Birth
Child development phase
Commissioning
Conception
New Born Infant Adolescent
Source: Authors Figure 1: Chart using the analogy of the separateness of the stages of foetal development and child development to explain the separateness of the project phase and the operations phase © 2014 Onyinyechi Okebugwu & Enoch Omajeh
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PM World Journal Vol. III, Issue VI – June 2014 www.pmworldjournal.net
Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
For mammals, the gestation period is the time in which a foetus develops, beginning with fertilization and ending at birth. After fertilization, development of the foetus starts. When fully developed, a baby is delivered. In all the time that it is developing and prior to delivery, it is a foetus but once it is delivered it ceases to be a foetus. It then becomes a baby, child etc but no longer a foetus. If after successful delivery there is any form of ailment, it CANNOT be called an ailing foetus. In the same vein, after the conception stage of a project, planning is started and followed by the development. After full development of the project and determination by the monitoring and control exercise that the project complies with requirements, it is closed and delivered. And once it has been successfully delivered it ceases to be a project. It then becomes a facility, structure, building etc but no longer a project. And if there is any problem thereafter, it CANNOT be called an ailing project. DISCUSSION The expression ‘white elephant project’ has two descriptors (i) white elephant and (ii) project. For anything to qualify as a ‘white elephant project’ it must meet the descriptors (i) and (ii) above; that is, it must be a white elephant and it must also be a project. In order to show the constant error made in defining white elephant projects, this study analyzed some endeavours supposedly called “white elephant projects” in the light of the definitions of the two descriptors (white elephant and project). These endeavours are: 1. The millennium Dome in London - The Dome was built at a cost of hundreds of millions of pounds to celebrate the millennium. The exhibition it initially housed was less successful than hoped and the building struggled to find a role after the event. It is now the O2, an arena and entertainment centre. 2. Olympic stadium in Montreal - The stadium cost about 1.61 billion (Canadian dollars). Since the departure of Montreal Expos baseball team in 2004, it has had no tenant. The debt from the stadium was not paid in full until December 2006. 3. The Ryugyong Hotel in Pyongyang, North Korea - The Hotel designed as the world’s tallest hotel began construction in 1987, but due to financial difficulties construction ceased prematurely in 1992. The structure remained as a massive concrete hulk, unfit for habitation until April 2008 when construction resumed, and an opening of the hotel was planned for the summer of 2013. Even if this is achieved, it will still be an astonishing twenty four (24) years behind schedule, and in its vertiginous space, there will be 1500 rooms – a smaller number compared to the 3000 first planned. It was designed to be the world’s tallest hotel but it has been overtaken in height by the Rose tower in Dubai (Parry, 2012). 4. The New South China Mall in Dongguan, China - The mall was opened in 2005 and was heralded as the largest shopping center in the world, with leasable space able to accommodate 2,350 stores. The owners expected 100,000 visitors a day (Nylander, 2013). However, the mall has remained virtually empty prompting many to brand it a white elephant project. 5. Refineria del Pacifico, an oil refinery to be built in Ecuador (scheduled for 2013) The refinery has been described as a white elephant because it will cost more than 12 © 2014 Onyinyechi Okebugwu & Enoch Omajeh
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Debunking the ‘While Elephant Project’ Myth
PM World Journal Vol. III, Issue VI – June 2014 www.pmworldjournal.net
Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
billion dollars and will need crude oil not extracted as of 2010. A board overseeing the project has since reduced the estimated cost of the project by about 23%, eliminating two units at the complex. The current estimate is about 10 billion dollars. Though the project was announced in 2007, Ecuador has been negotiating since 2011 to raise financing for it. Although negotiations about its financing have not been concluded, about 500 million dollars have already been invested in the project (Alvaro, 2013). Table 1 is an analysis of these supposedly/ allegedly white elephant projects describing their true status at the time of writing in light of the definitions of the descriptors (white elephant and project). Table 1: Accurate status of these undertakings Undertakings
White elephant
Project
White Elephant Project
The Millennium Dome
√
NO
Olympic stadium in Montreal
√
NO
The Ryugyong Hotel
√
The New South China Mall
√
Refineria del Pacifico
√
YES NO
√
NO
Source: Authors’ Analysis All the undertakings listed in Table 1 qualify as white elephants except the Refineria del pacifino. The first four (the Millennium dome, the Olympic stadium in Montreal, the Ryugyong hotel and the New South China Mall) can be rightly called white elephants because they all were very expensive to execute, they are definite failures because they failed in no small measure to meet set objectives, yet they require high cost of maintenance and/ or support. The exhibition the Millennium Dome in London initially housed was less successful than hoped and the building struggled to find a role after the event. After the departure of the Montreal Expos baseball team in 2004 from the Olympic stadium in Montreal it had no tenant for long spells, and the debt from the stadium was not paid in full until December 2006. The Ryugyong Hotel was designed to be the world’s tallest hotel but before its completion, it had been overtaken in height by the Rose tower in Dubai because its construction was prematurely stopped and halted for sixteen (16) years. Even if the opening of the hotel planned for the summer of 2013 is achieved, it will still be twenty four (24) years behind schedule, and will have 1500 rooms lesser than planned. The New South China Mall opened in 2005 with leasable space able to accommodate 2,350 stores. The owners expected 100,000 visitors a day (Nylander, 2013) but the mall has remained virtually empty. That constructing the Refineria del Pacifico require huge outlays and that negotiations about its financing have not been concluded does not make it a white elephant. This is because there is no reason to say that it will not be financed to completion. A committee has already cut scope to © 2014 Onyinyechi Okebugwu & Enoch Omajeh
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PM World Journal Vol. III, Issue VI – June 2014 www.pmworldjournal.net
Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
reduce cost and negotiations are seriously ongoing. Also, it cannot be determined that the refinery will fail in achieving the crude oil refining purpose for which it is expressly created. Of the five undertakings, only two qualify as projects, these are the Ryugyong Hotel and the Refineria del Pacifico. The Ryugyong Hotel is a project that was commenced, got abandoned and later recommenced, but it is yet to be completed (at the time of writing) and successfully delivered so that it can be commissioned and opened for operation. The keywords are that it is yet to be completed and delivered. So, it is still a project, though a good example of an unsuccessful one. The Refineria del Pacifico is also still a project in its early stages. The project has been conceived, some resources committed, and various financing and other plans are being made that will set the stage for the execution stage. The other three undertakings can no longer be called projects because they have long been completed and successfully delivered. The Millennium Dome and the Montreal Olympic stadium were successfully delivered for the exhibition and Olympic events respectively; the New South China Mall was built to specifications, met clients’ satisfaction and was duly opened for business. When the product of a project is duly delivered and accepted, the project ends. The deliverable should no longer be called a project. A project gave birth to it, but it itself is not the project. It can be called a facility, structure, building etc but not a project. In the words of Chitkara (2011), “Each project has a specified mission or purpose to be achieved. It ceases after the mission is achieved” The discussion above show that only the Ryugyong hotel can be rightfully called a “white elephant project”. This is because it meets the characteristics of both a white elephant and a project. It is a white elephant because it cost so much yet some of the goals for which it is being built have been defeated and can no longer be realized even when it is completed (it cannot meet some of its performance criteria). It is a project because it is still ongoing, yet to be completed and delivered. The Millennium Dome, the Olympic stadium and the New South China Mall all meet the characteristics of a white elephant but not those of a project because the projects that delivered them have long ended and closed out. Thus they can be called “white elephants” but not “white elephant projects.” The Refineria del Pacifico is not even a white elephant. It is simply an ongoing project. We can only wait to know if it will successfully be completed and delivered, only then will it cease to be a project, and assume the status of a facility. If the facility then fails miserably to perform the functions for which it was built but resources are still expended on it for support and maintenance, it becomes a “white elephant”. CONCLUSION There is an error in the understanding of white elephant projects. Many undertakings have been erroneously termed “white elephant projects”. The error made is in two forms: (1) the undertaking is a white elephant but not a project (2) the undertaking is not a white elephant but a project, with the former being the most occurring of the two errors. For any undertaking to be a white elephant project, it must meet the characteristics of a white elephant and those of a project. As a white elephant, it must be expensive to obtain, fail to meet © 2014 Onyinyechi Okebugwu & Enoch Omajeh
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Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
performance criteria, and still be wasting resources in its support or maintenance. As a project, it must have been initiated, in any of the phases of planning, execution, closing, but has not been delivered. For the purpose of this discussion, this paper concludes by proffering the definition below that satisfies the two descriptors in the term white elephant project. “A white elephant project is a burdensome, unviable undertaking that has neither been financed to completion nor closed out, has consumed huge resources to get it to its current state and though it cannot be put to its intended use effectively, is still wasting resources for its support or maintenance”
REFERENCES Alvaro, M. “Ecuador in Talks with China’s CNPC for 30% stake in Refineria del Pacifico”. January 30, 2013. Retrieved from www.online.wsj.com/articles Chitkara, K. K. (2011): Construction Project Management: Planning, Scheduling and Controlling, Second edition, Tata McGraw Hill education Private Limited, New Delhi Nylander, J. “World’s biggest mall a China ‘ghost town’”. March 10, 2013 CNN news report. Retrieved from www.edition.cnn.com Martin, G. (2013); “The meaning and origin of the expression: A white elephant” The Phrase Finder. Retrieved from www.phrases.org.uk/meanings NairaLand Forum “Lekki Airport: White Elephant Project” by Emeka Aloy on Aug 30, 2009. Retrieved from www.nairaland.com Parry, S. “Welcome to the Hotel of doom: the 3000 room monstrosity in Kim Jong- Un’s starving dictatorship no foreigner has stepped inside… until now” Published December 8, 2012. Retrieved from www.dailymail.co.uk/news/article Robinson, James, A. and Torvik, Ragnar (2005); White elephants, Journal of Public Economics, Elsevier, vol. 89 (2 -3) pages 197 – 210, February The American Heritage Dictionary of the English Language, (2000) Fourth Edition by Houghton Mifflin company. Updated in 2009. Published by Houghton Mifflin company. The Nigeria Sun “Nigeria: Airport Cities as White Elephant Project” All Africa Sunday October 7, 2012, Retrieved from http://www.nigeriasun.com
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Debunking the ‘While Elephant Project’ Myth Featured Paper
by Okebugwu, Onyinyechi F. & Omajeh. Enoch O-M
About the Authors
Onyinhechi F. Okebugwu Owerri, Nigeria
Onyinyechi F. Okebugwu has a B. Tech in Project Management Technology, and is currently writing her thesis, having completed course work for the award of MSc in Project Management. Her area of Interest is Project Human Resource Management, Team Formation, and Team Development. She can be contacted at
[email protected]
Enoch Oghene-Mairo Omajeh Owerri, Nigeria
Enoch Oghene-Mairo Omajeh has a B. Tech in Project Management Technology, and is currently writing his Master’s thesis for an MSc in Project Management. His particular areas of interest are assessing causes of project failures and determining critical factors to project success. Omajeh can be contacted at
[email protected].
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