Note: The assignments in this course are a series of papers that are based on the same case, which is located in the XanEdu tab in the left-hand menu of your course. The assignments depend on one another. During the project life cycle, project risk reviews and reports are required, as previously identified in the risk management plan. Two months after the project started, the following events have taken place:
Write a 4–6 page paper in which you:
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
No return if unwrapped
BUS 519: Project Risk Management
THIS PRINT COURSEPACK AND ITS ELECTRONIC COUNTERPART (IF ANY) ARE INTENDED SOLELY FOR THE PERSONAL USE
OF PURCHASER. ALL OTHER USE IS STRICTLY PROHIBITED.
BUS 519: Project Risk Management – Spring 2021
XanEdu™ publications may contain copyrighted materials of XanEdu, Inc. and/or its licensors.
The original copyright holders retain sole ownership of their materials. Copyright permissions
from third parties have been granted for materials for this publication only. Further reproduction
and distribution of the materials contained herein is prohibited.
WARNING: COPYRIGHT INFRINGEMENT IS AGAINST THE LAW AND WILL RESULT IN PROSECUTION TO THE FULLEST EXTENT OF THE LAW.
THIS COURSE PACK CANNOT BE RESOLD, COPIED
OR OTHERWISE REPRODUCED.
XanEdu Publishing, Inc. does not exert editorial control over materials that are included in this course pack. The user hereby releases XanEdu Publishing, Inc. from any and all liability for any claims or damages, which result from any use or exposure to the materials of this course pack.
Items are available in both online and in print, unless marked with icons.
− Print only − Online only
Table of Contents
“Environmental Quality International in SIWA” by Story, Jonathan 1
“British Petroleum (PLC) and John Browne: A Culture of Risk Beyond
Petroleum (A)” by Bryant, Murray J.; Hunter, Trevor
“The PCNet Project (B) Dynamically Managing Residual Risk” by Loch,
BUS 519: Project Risk Management – Spring 2021
International in Siwa
This case was written by Professor Jonathan Story, Emeritus Professor of International Political Economy at INSEAD. It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Copyright © 2009 INSEAD-Rensselaer
TO ORDER COPIES OF INSEAD CASES, SEE DETAILS ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION.
Copyright © 2009 INSEAD-Rensselaer 1 04/2009-5607
When Mounir Neamatalla, President of the private Egyptian firm Environmental Quality International (EQI), first set eyes on the Siwa Oasis in 1995, in the Matrouh region of Egypt in the Sahara desert, he was enthralled. Neamatalla, a consultant who had studied environmental management at Columbia University, was visiting the oasis on a project for the Canadian Development Agency. He was struck by the fact that, with a few anachronisms, the community he was visiting could easily have been the one described by Herodotus 2,500 years earlier. Here was an ideal fit with EQI’s mandate to promote sustainable development projects wherever the opportunity beckoned. Where others saw poverty and isolation, Neamatalla saw riches: a culture, tradition and heritage untouched by the passage of time.
Over the years that followed, EQI designed and implemented a number of commercial ventures aimed at promoting economic development in Siwa—one that would be in harmony with Siwa’s environment and that would revitalise its unique cultural heritage. EQI's approach was to draw on the old wisdom, traditional skills and creativity of the local community, and complement them with modern know-how to develop Siwa into a model of sustainable development that could serve as a source of inspiration for other communities around the world. Some of these ventures are currently being replicated by EQI in other parts of the region.
The past few decades have seen Egypt move from a pan-Arabic, largely socialist state at war with Israel, to an increasingly market-oriented anchor of stability in a troubled region. As one of two Arab countries that have forged peace with Israel, Egypt has played an important role in promoting dialogue between Israel and its Arab neighbours.The North African country is one of the largest recipients of American aid. In 2008, it was slated to receive $1.3 billion in military aid and another $415 million in economic assistance. With a population of 80 million, it is home to one in four Arabs.
The population of Egypt is concentrated along the Nile river banks and is urbanizing fast as rural inhabitants pour into the main cities of Cairo and Alexandria. From 43 million in 1980 to nearly 80 million in 2005, it is estimated by the UN to reach 100 million by the 2020s. Population density is among the world’s highest. The urban population accounts for 42% of the total and is growing at a rate of 1.8% per annum. Farming represents 29% of GDP, industry 22%, and services 49%. Per capita income is $1,200 and the literacy rate is 57%. Water scarcity is a prime concern. Roughly 96% of Egypt’s land mass is made up of desert. The only arable regions in Egypt are the green floodplains that line the Nile basin. Urbanisation is eating into scarce arable land and putting the environment under great stress.
Politically, Egypt is still a highly centralised republican state in the midst of a process of political and economic liberalisation. It has already transformed from a single party to a multi- party political system, and from a socialist to a market oriented economy. Extensive powers are vested in the president, who is nominated by a two-thirds majority of the People's Assembly and then elected by popular referendum for a six-year term. Since the assassination of President Muhammad Anwar el-Sadat in 1981, the office has been held by Mohammad Hosni Mubarak, who has been re-elected five times. Like Sadat, Mubarak had a distinguished former career in Egypt’s armed forces. The president appoints the government and enjoys the support of the dominant National Democratic Party (NDP), which has secured a majority in
Copyright © 2009 INSEAD-Rensselaer 2 04/2009-5607
the directly elected People’s Assembly. The government is reported to be facing demands for political reform from both secular and liberal opposition parties and from the officially banned fundamentalist Muslim Brotherhood. President Mubarak’s crackdown on opponents has led to calls for restraint from the United States.
The Muslim Brotherhood, the strongest of the opposition groups, has spent most of its history debarred from politics because of the country’s secular constitution. Elections in 2005 were marred by allegations of intimidation and ballot rigging. Israel’s Ariel Center for Policy Research concluded that Cairo had no choice but to engage in a degree of reform in order to keep resentment at bay. Most international analysts and research institutions agree that Cairo would benefit from engaging in significant reform.
The threat from militant Islamic groups re-emerged after a lull from the late 1990s until 2004, when a series of bombings in the southern Sinai peninsula highlighted the exclusion of the local population from the mass tourism development of their region. Despite sympathy for the plight of the Bedouins, the attacks were unpopular amongst Egyptians, not least because of the damage to Egypt’s valuable tourist industry.
The armed forces of Egypt are the largest on the African continent. The military and security- related budget is not public information but most published sources put Egyptian military expenditure at 7% to 10% of GNP. In addition to the armed forces, Egypt maintains a large paramilitary force around 350,000 strong, known as the Central Security Forces, under the Ministry of the Interior. The National Guard and border security forces come under the control of the Ministry of Defence and are reported to number 60,000 and 20,000 respectively.
Administratively, Egypt is divided into 28 governorates, each headed by a governor who is appointed by the president. Within their districts, local government units establish and manage all public utilities, provide services and designate industrial areas. Local popular councils are elected bodies that work closely with local government administrative units at various levels.
Economically, the country is in midst of shaking off a socialist past whose heritage owes as much to the bureaucratic tradition of the Byzantine empire as to any regard for workers’ rights. Fiscal reforms introduced in 2005 have lowered unemployment and attracted record foreign investment. Customs—once famously corrupt and inefficient—have been streamlined. Tariffs have been cut and simplified. The Egyptian pound has been floated. In 2007, the country achieved growth of 7.1%, mostly due to $11.1 billion in foreign direct investment.
Yet the Egyptian economy, while growing, is weak. Although non-oil and gas exports increased 45% in the 2006-2007 fiscal year and were expected to rise from $14 billion in 2007 to $18 billion in 2008, total exports, at $27 billion, remain small when compared to similarly-sized countries. Turkish exports, for instance, run at over $120 billion a year. Most of Egypt’s growth has been constrained to energy-intensive industries—cement, chemicals and fertilizers—that take advantage of high energy subsidies. The country continues to run a $16 billion trade deficit, importing most of its meat, wood and grain, as well as much needed capital goods equipment.
Copyright © 2009 INSEAD-Rensselaer 3 04/2009-5607
That the World Bank ranked Egypt first in a list of countries introducing investor-friendly reforms in 2007, reflected both the progress achieved and the distance left to travel. Red tape, a proliferation of regulations and regulatory agencies, bogged-down courts, and a sometimes whimsical decision-making system, makes operating in the country difficult and unpredictable. The World Bank placed Egypt 126 out of 178 countries in terms of ease of doing business. Despite the recent growth, unemployment remains high at 9%. The median age of the population is 24, compared to 39 in France, with only 43% of the employable labour force aged 16 to 64 in work, against 62% in France.
Growth in manufacturing and industry tends to be capital rather than labour intensive. Labour productivity in agriculture and services is low. Inflation is around 8% and there is widespread concern over rising income inequalities—despite improvements recorded by the UN Human Development Index over the past 30 years. According to the World Bank, one in five Egyptians can not meet their basic daily needs. Absolute poverty rose from 16.7% in 2000 to 19.6% in 2005.
Tourism provides the country with a major income stream, representing 20% of foreign currency earnings, despite the bombings in southern Sinai on the Red Sea. In 2007, Tourism Minister Zuheir Garana announced plans to boost tourist earnings by 26% to $12 billion dollars by 2011. Egypt aims to welcome some 14 million tourists in 2011, requiring a capacity of 240,000 hotel rooms, compared with 11 million in 2007. Besides catering to the mass market coming to visit the country’s famed pyramids and beaches, the minister said Egypt aimed to attract private investors to develop eco-tourism and medical tourism. Niche, luxury and eco-projects—such as EQI’s Siwa development—remain rare.
The oasis of Siwa was first inhabited nearly 12,000 years ago, but only since 1986 has a road made it accessible to the rest of the world. Siwa is part of an archipelago of oases dotting the Sahara. From its origins as a Berber village, the green grass and natural spring water of the desert oasis served as an ancient stopover for caravans travelling from North Africa to the Arabian peninsula. Herodotus described it as a salt mine whose inhabitants built their homes from bricks of salt, and home to the powerful oracle of Ammon. When Alexander the Great entered Egypt in 331 B.C., he was received like a pharaoh. He rode through the blistering heat of the desert to consult the oracle. The oracle welcomed him in a spectacular procession and it is said that he blessed his mission to spread his ideas worldwide.
Located in western Egypt, not far from the border with Libya, the oasis is 80 kms long and roughly 20 kms wide, a swathe of palm and olive trees, natural springs and salt lakes surrounded by the sands of the Sahara. The abundant water is due to the presence of a large geological depression; most of the area lies around 20 metres below sea level.
In its centre, the crumbling Fortress of Shali dominates the village. Most of the local population used to live within its walls until 1926, when three days of continuous rainstorms washed the walls away, forcing the inhabitants to abandon their homes. Until recently, the fortress had not been restored. Rather, it has been ravaged by the dismantling of its buildings as residents abandoned them, taking with them doors, windows, and even supporting wooden beams and cladding as they resettled on the plains around Siwa. The remains of the fortress
Copyright © 2009 INSEAD-Rensselaer 4 04/2009-5607
continue nonetheless to serve as an example of Siwa’s traditional construction techniques. The buildings were made of a mixture of salt and mud called kershef bricks, and rock salt blocks, supported by palm logs. Some of the medieval structures stood up to five storeys high. After 1926 the town was rebuilt around the fortress, but further rains in 1985 marked the general abandoning of traditional building techniques. For the reconstruction effort, mud and palm gave way to cement blocks.
The oasis is home to between 20,000 and 30,000 residents, up from 5,000 in the 1970s. The local population is divided into 11 tribes, whose sheikhs provide their people with a traditional approach to resolving disputes. The tribal judicial system is deeply respected by the inhabitants. “We are all family,” says Abdallah Baghi, head of education in Siwa. Cairo is happy to keep this arrangement. The sheiks receive a government salary, and the mayor—who is a government appointee—heads the elected town council. The mayor is nominated by the provincial governor, to whom he reports. Mayors tend to be retired military officers. While the land officially belongs to the state, Cairo recognises the mosaic of historic ownership patterns administered by the tribes. Residents retain their own language, Siwi, related to the Berber dialects which span the Sahara through to Morocco. The land surrounding the villages is given over to agriculture, 300,000 date palms and 70,000 olive trees.
For much of its history, Siwa’s location isolated it from mainstream history. From the fall of the Roman Empire, its independence went largely unchallenged until the 19
Arabian conquerors of Egypt regarded its oases as rough, impoverished desert settlements. Armies that might have made it through the desert were repelled by the central fortress or by the paucity of riches. The first European arrived in 1792 but the oasis was not brought into the fold of modern states until 1840, when the Ottomans shelled its citadel and massacred its chieftains. The first Egyptian ruler to visit Siwa was the Khedive Abbas Helmy II in the early years of the 20
th century. The Khedive laid the foundations for the Great Mosque, the first
public edifice built by the state. His grandson, Prince Abbas Helmy III, has returned from the UK to build himself a house in Siwa. He makes a point of praying in his grandfather’s mosque.
Even then, contact with the rest of the world was limited mostly to the taxes it paid and, briefly, to the passing armies of the World Wars. It wasn’t until 1977, when President Sadat took an interest in the oasis, that modernity began to intrude. As part of the Camp David accords with Israel, the Egyptian army evacuated the Sinai—which was later opened up to modern mass tourism—and was re-deployed to the western Egyptian desert, guarding the frontier with Libya. In 1983, a military cantonment was set up in Siwa, providing the villages with access to a helicopter for medical needs. Soon afterwards, the Egyptian state built the asphalt road that reached 300 kms through the desert to link the oasis with the provincial capital on the coast.
With that connection came increased attention from the state: schools, health services and a smattering of investment—enough to begin to wear away centuries of traditional culture. Motorbikes, cars, television, internet and mobile phones began rapidly widening the Siwis’ horizons to the rest of the world. Along with a growth in western tourist traffic, a strong reform current of Islamic practices undermined the softer traditions of Siwan practice. The proliferation of wells lowered the water table; ironically the pumped water flooded the lakes, pulling the salt towards the surface, endangering cultivation and killing swathes of palm groves. Traditional craftsmen found that fewer students were interested in learning their art.
Copyright © 2009 INSEAD-Rensselaer 5 04/2009-5607
The older generation feared that ancient Siwi values were eroding as the young generation turned its gaze to the world beyond the oasis.
Environmental Quality International
Among the new arrivals since the road was built was EQI, which first came to Siwa with a consulting capacity in the 1980s and began investing in the region in 1996. EQI’s plan was to create a suite of projects that capitalised on the oasis’ resources. By nurturing and polishing those aspects of Siwa that it identified as marketable, the company would target the high-end of the value chain in global tourism. Because it would rely on the undisturbed nature of the oasis it would have to minimize its impact on the community. Materials and labour, wherever possible, would be local.
Practices would be sustainable with the aim of preserving the local culture, heritage and landscape. By valuing what was local, development would not come at the expense of traditional life. The oasis would present the world with an example of how poverty could be reduced by capitalising on local culture and safeguarding the environment. If all worked well, the road to the oasis’s future would run through the riches of its past. Siwa would once again become an oracle, this time for sustainable development.
EQI’s component projects, described below, attracted the attention of the International Finance Corporation, which provided $880,000 in loans and $486,000 in technical support. They comprise three hotels, a line of embroidered products and traditional jewellery, and the export of organic agriculture. The company provides direct and indirect employment to more than 600 Siwans as suppliers, staff, craftsmen and women and builders. The projects at Siwa were the consulting company’s first real investment: “a foray” in the words of Neamatalla, “away from the world of advice and into the world of execution.”
Adrère Amellal Oasis
EQI’s Siwa centrepiece (and the only investment that did not benefit from the IFC loan) is the Adrère Amellal Oasis, a desert lodge built at the foot of a mountainous outcrop overlooking Siwa’s largest lake, some distance from the main settlement. The company wanted to build a luxury lodge in the traditional style, using palm logs and blocks made from rock salt and mud. But when it began to enquire, it found that the knowledge of traditional building techniques was confined to a small group of old men. The ancient style was seen as archaic and expensive. New construction employed modern materials like concrete and cement, cooled (for those who could afford it) by air conditioning.
If EQI wanted to build in the Siwan style—and it did—the company would have to rescue a skill that was slipping away. They began with a team of three builders, with mixed results. After the first 20 rooms were built, the company discovered that the untreated palm logs they had used were infested with mites; the insects were dropping from the ceiling onto the beds, hardly acceptable in what was to be a high-end resort. Fumigation, besides being a departure from their vision, proved ineffective, so the company consulted the village elders, who provided the solution: if the logs were soaked in the salt lake for several days then baked in
Copyright © 2009 INSEAD-Rensselaer 6 04/2009-5607
the sun for several days, the mites would be gone. The method worked, but the initial roofing had to be torn off the first 20 rooms so that construction could begin afresh.
The construction was ultimately successful. Not only did it provide the lodge with the elegance and authenticity of tradition, it also revived a craft at risk of being lost. The oasis now has 150 enterprises trained in traditional building techniques. Their revival reawakened a pride in the oasis’ cultural heritage. Increasingly Siwan builders choose to use palm logs and rock salt blocks instead of more modern materials, and the state governor has decreed that all new constructions are to be built in the traditional style. This has encouraged outsiders to build tourist facilities along traditional lines.
The hotel, which took eight years to build, began small with eight units, but quickly expanded through word-of-mouth publicity to 24 rooms, with a maximum occupancy of 70 guests. Priced at a range of US$ 350-450 per night, it has achieved a level of appreciation, attracting interesting travellers from all over the world and from all walks of life – including scholars, politicians, artists, fashion designers and even young students. In addition, the lodge is environmentally efficient. Kept cool during the day by the thick walls, it uses no electricity. Beeswax candles are used for lighting. Coal braziers provide heating when needed. The ceilings are made from palm and the fixtures are made from olive wood. The swimming pool is fed by natural springs. Dinner consists of organic food, mainly grown locally.
The lodge’s staff is also predominantly local, providing employment and advancement to 60 members of the Siwan community. Keeping salaries at local levels are key to the lodge’s financial success. Partly because it kept expensive international staff to a minimum— primarily in a consulting capacity for the kitchen—the hotel was profitable after just five years.
In 2005, the eco-lodge was ranked second by Condé Nast Traveler on the magazine’s list of “Green Resorts”. In 2007, Travel & Leisure listed it among its top 20 “Favorite Green Hotels”. It has also received the magazine’s 2006 “Global Vision” award. Most importantly perhaps, the lodge serves as the flagship for EQI’s business model, proudly displaying Siwa’s past and culture like roughened gemstones that, properly cut and set, provide an experience that can be found nowhere else.
Shali Lodge and Albabenshal
The company’s second project, which was built concurrently, was another hotel, Shali Lodge, set in a palm grove near the village of Siwa. Built once again in the traditional mud and salt brick fashion, the hotel offers eight rooms furnished in the company’s simple, plush style to travellers who may not have the budget for the luxury lodge in the desert. The hotel provides employment to 20 Siwans. The IFC loan allowed EQI to add a plan for its extension that would double that number.
Shali Lodge is a five-minute walk from the oasis’ prime archaeological attraction, the Fortress of Shali, and the surrounding, largely crumbling traditional village. Albabenshal, another more recently built 11-room heritage hotel, is located at the foot of the Shali Fortress, raised from the restored ruins of derelict houses abandoned during the rains of the 1920s.
Copyright © 2009 INSEAD-Rensselaer 7 04/2009-5607
In addition to offering the company’s services to a different category of traveller, both lodges provide the company with a presence in central Siwan life, and serve as reminders that EQI is not an aloof proprietor of an hotel set apart from the rest of the oasis. The company also hopes that its restoration efforts will serve as an example for Siwans looking to rebuild their old town.
In 2001, soon after EQI had built its first two lodges, the company realised that all its employees and partners were men. Siwan culture is very conservative and there is a strict separation of men and women; women refused to work in the hotels or anywhere adult males were present. Seeking to expand the company’s impact, Mounir Neamatalla turned to his sister, Laila, a jewellery designer, who after some research, decided she would tap into Siwa’s tradition of embroidering. Again, EQI was faced with reviving and adapting a craft that was fading from local memory. Siwan’s fine stitching was unique, but few members of the younger generation knew how to do it.
Laila Neamatalla began an initiative whereby grandmothers were asked to train young women artisans in the ancient tradition, and the eco-lodge began offering local products embroidered in the traditional style to its discerning clientele. As the work flourished, she realised that quality control would be easier if she moved her workers from their homes into a workshop.
The project took off quickly. Beginning with 50 trainees funded through a grant from the British Embassy, within a year Neamatalla had 300 women stitching for her. Girls work in the workshop learning the basics of quality control until they get married, after which they continue to work from home. Traditional motifs are embroidered onto blouses, gowns, shawls, sarongs, towels, sheets and tablecloths. Necklaces are made from buttons and semi- precious stones. Embroidered leather is set in silver to make rings and bracelets. The products are sold not only in the lodge but in high-end outlets in Egypt, Italy, France and England. In 2004, the Florentine haute-couture fashion house Ermanno Scervino began incorporating Siwan embroidery into its collection. Material is sent from Florence to Cairo, shipped to Siwa, where it is stitched and sent back to be assembled in Italy.
In addition to reviving a fading art, the project has been an economic success for the Siwan artisans. Fearing that if she paid her workers too much she would upset the male-dominated economic order and trigger resentment—Laila set her initial piece rate at a level slightly less than what a man could earn in a day. Nonetheless, payment is based on production and a productive embroiderer can easily out-earn the men in her household.
The success with the women led to demand for something similar for the men, more than 70% of whom worked in agriculture. EQI responded with an effort to boost local attempts at organic production. The biggest obstacle facing the farmers, the company found, was a lack of liquidity. Farmers would finance their agricultural inputs by selling their crops before they were planted, sometimes with disastrous results: if the harvest fell short they might be forced
Copyright © 2009 INSEAD-Rensselaer 8 04/2009-5607
to sell their land to pay their debts. To hedge against these risks, Siwan farmers had begun to use chemical fertilizers to maximise their yields.
Recognising this as a problem, and using funds provided by the IFC, EQI began offering to pre-buy the crops for 40% to 50% more than the market price, provided the harvest was grown organically. The company also started a cattle financing project to supply a source of alternative fertilizer, as well as milk: it would buy cows for farmers to raise, after which the two parties would split the profits. The schemes were expected to benefit 200 to 300 farmers and preserve the region’s production of organic produce.
The company also began processing and marketing the region’s products with a line that included olives, dates and local produce such as olive tapenade, sycamore jam, and hibiscus syrup. This helped to add value to traditional practices and also served the global market. Siwans traditionally harvested their olives by stripping them directly from the branch, leaving the fruit scratched, bruised and unsuitable for sale in Europe. So EQI asked the farmers to begin hand-picking the olives. A local recipe for brining the olives involved much more salt than is customarily used elsewhere, the result of the mineral’s abundance as well as a means to preserve supplies for lean years. EQI’s recipes use a more conventional amount of salt, designed to last one season and please the international palate.
The project reflects the premium the company puts on its image. Its benefits aren’t only economic and don’t only accrue to the farmer – they are critical to burnishing and preserving Siwa’s image as a place of tradition, purity and environmental awareness.
Challenges Going Forward
The biggest challenge EQI faces is helping the community in which it is located to balance …
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
2. Fill in your paper’s requirements in the "PAPER INFORMATION" section and click “PRICE CALCULATION” at the bottom to calculate your order price.
3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for record keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.
Why Hire Safehomework.com writers to do your paper?