This paper focuses on risk management of the new city construction in the United Arab Emirates called Masdar City. The city is being built by Abu Dhabi Future Energy Company with much of capital provision being initiated by the Abu Dhabi government. It reviews the risks associated with the project, analyzes the risks, estimate the risk levels, and finally suggests the solutions for mitigating the risks (Culp, 2001). Among the projects goals are to provide high quality science and technology, and employing renewable power resources with an aim or reducing social and environmental pollution. Risks for this project may come from different stages of the project development which include during designing stage, production stage, and implementation stage or even during the planning stage.
The main types of risk surrounding the construction of the Masdar City include lack of enough capital, environmental pollution associated with failure to renew and dispose carbon waste and terrorism risk. First, the Masdar city project is estimated to cost US$22 billion which is a huge amount of money. This is a mega project and thus the Abu Dhabi government will experience a huge budget for its expenditures. As a result, the government may not be able to meet this amount and this may delay the completion of this project. Lack of enough capital stands as one of the serious risks projected to hit the construction of Masdar City.
Secondly, with high expectations of many industry developments in the city, Masdar will face a challenge of increased environmental pollution. Such pollutions may include air pollution, water pollution, noise pollution, thermal pollution and other forms of pollution related to industries. Though one of its goals is to minimize carbon wastage to zero, it still stands out as a big risk. Waste control is one of the challenges facing many cities in the world following lots of industrial pollutions and thus Masdar City will not be optional. Finally, terror attacks in the United Arab Emirates have become the order of the day in the modern life. With increased awareness terrorism in the Middle East, Masdar city is not an exception and thus there is a high probability of terrorism attacks. This risk may be very serious since incase of any terror attack in the city, then its completion may be delayed. Furthermore, such attacks may lead to the demolition of the whole projects especially if nuclear bombs are used.
The risk levels for the above mentioned risks vary with the degree of each risk. First, financial risk has a high risk level this is because its likelihood to occur is certain. Just as any other project, financial difficulties have high probability of occurring. On the other hand, the risk level for environmental environment pollution is also very high because its likelihood to occur is certain and it has fatal injury to humans living in the surrounding. Finally, terrorism risk is moderate risk level because it is dependent of the Abu Dhabi’s government relation with its neighborhood countries. If it has good relationship with the neighbor countries, then the probability of a terrorist attack is very low and vice versa (Das, 2006).
Holistically, the government should also come up with various environmental pollution control measures to counter the pollutions emanating from the industries in the city. Such control measures include sewage treatment; make use of dust collection systems, and carbon recycling. This will play a vital role in minimizing the effects related to environmental pollution. Finally, the government should work hand in hand with other governments in the United Arab Emirates with an aim of fostering good relationship, understanding, and promoting peace. This will help the government prevent risk associated with terrorism.
References
Das, S. (2006). Risk management (3rd ed.). Singapore: John Wiley & Sons.
Culp, C. L. (2001). The risk management process business strategy and tactics. New York: J.
Verma, S. B. (2005). Risk management. New Delhi: Deep & Deep Publications Pvt.
