1. COST MANAGEMENT ANALYSIS Dr. Fereshteh Mafakheri
BURJ KHALIFA
COST MANAGEMENT ANALYSIS
CASE STUDY
Presented to
Dr. Fereshteh Mafakheri
TEAM MEMBERS
Ahmed Nour Eldin
Ali Reza Zadissa
Oluwaseye Ayobami
Osama Khan
Temitope Adetula

2. WHICH IS THE TALLEST BUILDING IN THE WORLD?
It’s the
BURJ KHLAIFA at 828m
Located in Dubai Burj Khalifa is the tallest building in the world
Designed to be a milestone of ingenuity, inspiration & achievement

3. OUTLINE Introduction Facts and Figures Project Cost Management
Cost Evaluation & Analysis
Project Success or Failure
Conclusion

4. 1. INTRODUCTION
Planned by the Dubai government with the goal of becoming a hub for finance, trade and tourism in the Middle East
Designed by Skidmore, Owings and Merrill Architecture of Chicago
Built by EMAAR Properties
The primary contractor was Samsung C&T of South Korea
These are the main stakeholders
Located in Dubai Burj Khalifa is the tallest building in the world
Designed to be a milestone of ingenuity, inspiration & achievement

5. 2. FACTS AND FIGURES
At over 828 meters (2,717 feet) and more than 160 stories,
Burj Khalifa holds the following world records:
Tallest building in the world
Tallest free-standing structure in the world
Highest number of stories in the world
Highest occupied floor in the world
Highest outdoor observation deck in the world
Elevator with the longest travel distance in the world
Tallest service elevator in the world

6. 3. PROJECT COST MANAGEMENT
The initial planned costs of the project was $876 million
The final cost, however, was approximately $1.5 billion
From 47 months to 57 months
$624 million
difference between the initial planned and the final project cost
Cost overrun of 72 %

8. 3. PROJECT COST MANAGEMENT
Reasons for cost overruns
1. Changes in the final height
“EMAAR” decided to change the final height of building
Change in Scope, which means additional work
COST INCREASE
A change of design was responsible for the cost increase.
The Emaar property decided to change the final height of building: the final construction was 100 meters higher than the original design.
Thus, unexpected costs were incurred

9. 3. PROJECT COST MANAGEMENT
Reasons for cost overruns
2. Changes in interior design planning
“Armani Hotels” requested a change in the interior design
Changes in the design of the lobby, and adding more luxurious fittings to the rooms
COST INCREASE
The Burj aimed at being the world's best building
Wished for the building to have the best facilities
Emaar made a contract with luxury hotel chain Armani

10. 3. PROJECT COST MANAGEMENT
Reasons for cost overruns
3. Downturn of the Global economy in 2008
Downturn of the Global economy in 2008
A rise in price of raw materials
Price of iron had increased by 75% within a year. Other materials such as aluminum and cement also increased
Construction cost increased
A rise in prices of raw materials had gone up significantly
This was due to the downturn of the global economy in 2008

11. 4. COST EVALUATION & ANALYSIS
The project spent more money than initially planned
The project's earned value decreased
The project's cost management did not perform well
WHAT WENT WRONG
WHAT WENT RIGHT
After only one year in finishing the project:
The net profit increased about 10 times.
This revenue came from external customers
Sales of residence also dramatically increased

12. 5. PROJECT SUCCESS OR FAILURE
Standard measures: Scope, time, cost and quality
SCOPE
Did the project meet its main scope?
YES
COST
Was it finished within the the estimated budget? NO
TIME
From 47 months to 57 months
Was it finished on time? NO
QUALITY
Did the project meet requirement of its stakeholders?
YES

13. 5. PROJECT SUCCESS OR FAILURE
Other Performance indicators that should be considered
REVENUE
Does it create revenue?
YES
SOCIETY
Does it contribute to Dubai society?
E.g. Sydney Opera
YES
Consequently, in a number of respects, overall outcomes of Burj Khalifa met its objectives. Hence, the project can be regarded as a successfully completed project.

14. 6. CONCLUSION
The Success of large scale projects should measured based on:
Time
Cost
We believe high estimate was implemented
Benefits to stakeholders
Contribution to local society
Overall this project was a success for :
Being a source of inspiration and innovation in the region
Bringing the world’s attention to Dubai
Increasing tourism and investments in real state
Mention Sydney opera house.