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Template for a Publication in the International Journal of Technology International Journal of Technology (2018) 5: 898-909 ISSN 2086-9614 © IJTech 2018 LESSONS LEARNED FROM A CANCELLED URBAN TRANSPORT PROJECT IN A DEVELOPING COUNTRY: THE IMPORTANCE OF THE FRONT-END PLANNING PHASE Seng Hansen1, Eric Too1*, Tiendung Le1 1School of Property, Construction and Project Management, RMIT University, Melbourne, Victoria 3000, Australia (Received: February 2018 / Revised: March 2018 / Accepted: October 2018) ABSTRACT In many developing countries, infrastructure development has played an important role in driving economic and social growth. It has also been useful in accelerating development at both regional and national levels. Nevertheless, history provides many examples of infrastructure projects that have been cancelled for one reason or another. Such cancellations have often resulted in losses. Thus, it is important to study and learn from these cancelled projects in order to improve future project performance. This paper investigates the case of a cancelled urban transport infrastructure project in Indonesia. The case considered in this study is that of the Jakarta monorail project which was started in 2004 and completely discontinued in 2015. The example of the Jakarta monorail project is instructive as it has not been the subject of intensive study up to this point. This paper takes a case study approach, coupled with comprehensive reviews of extensive sources on the topic of cancelled infrastructure projects. This study applies a thematic coding technique using NVivo11 software to analyze and find patterns from qualitative data. The observed issues were grouped into three categories, i.e.: the history, causes and impacts of the Jakarta monorail cancellation. Furthermore, the authors also underscore the importance of making a “kill decision” as an option. The findings from this paper also highlight the importance of front-end planning in infrastructure projects. Keywords: Cancelled projects; Front-end planning; Infrastructure; Jakarta Monorail; Lessons learned 1. INTRODUCTION Developing countries invest billions of dollars to build new infrastructure. The result is the development of infrastructure such as transport, power plants, telecommunications, water supply, irrigation, sanitation, etc., all of which are expected to improve people’s standard of living. An example can be found in the case of Indonesia, which has invested heavily in infrastructure projects. Increased investment in infrastructure development by the government is expected to stimulate Indonesia’s economic growth (Latief et al., 2016; Berawi, 2017). Unfortunately, the benefits of such investment has not been fully realized, as demonstrated by the numerous failed or cancelled infrastructure projects. This has resulted in significant economic, social and environmental losses due to improper investment planning and utilization, which makes “doing the right project” more important than “doing the project right.” Therefore, it is important for organizations to heed the lessons learned from previous projects. *Corresponding author’s email: [email protected], Tel. +61399250192, Fax. +61399252000 Permalink/DOI: https://doi.org/10.14716/ijtech.v9i5.1559 899 Lessons Learned from a Cancelled Urban Transport Project in a Developing Country: The Importance of the Front-end Planning Phase Organizations in the construction industry should not make repetitive mistakes, especially on such large projects (Caldas et al., 2009). In light of the historical examples described above, the aim of this paper is to examine the example of a large cancelled infrastructure project in Indonesia and consider the lessons learned from such a case. To achieve this broad aim, this paper addresses two questions. First, why was this large infrastructure project cancelled? Secondly, what can be learned from this cancelled infrastructure project? Consideration of the first question is vital in order to identify the reasons behind this infrastructure project cancellation, while addressing the second question will make it possible to identify the impacts and important lessons learned from the project cancellation. This paper begins with a review of cancelled infrastructure projects in developing countries and the importance of the lessons learned from these projects. Using one particular case study from Indonesia, this paper presents the causes and impacts of a cancelled infrastructure project. Finally, this paper raises the importance of effective front-end planning to project success. 2. LITERATURE REVIEW 2.1. Abandoned and Cancelled Infrastructure Projects The main objectives of construction projects are to complete the project on time, within the specified budget and in accordance with the specified standards of quality. However, it is not uncommon for construction projects to be delayed or even cancelled for various reasons (Hoe, 2013). In Indonesia, perhaps the most well-known example of a cancelled infrastructure projects is that of the Jakarta monorail. Examples of construction projects being cancelled and then abandoned are not unique to Indonesia. Both developing and developed countries face similar challenges in this regard. Examples can be found in Malaysia (Hoe, 2013; Abdul-Rahman et al., 2015), Spain (Carrero et al., 2009), the United States (Hicks, 2008), Jordan (Al-Hazim et al., 2017), Ghana (Frimpong et al., 2003), Nigeria (Mansfield et al., 1994), Dubai, Abu Dhabi, Saudi Arabia, Qatar, Bahrain, Kuwait, and Russia (SPIEGEL, 2009). Even though the problem of construction project cancellation is a common one, there is nevertheless a lack of research in this area. Project termination or cancellation is the discontinuation of a project before it achieves its complete implementation (Kumar et al., 1996). A kill decision on a project typically occurs at a major project milestone (Cooper, 2008) or at one of the stage-gate phases. Abdul-Rahman et al. (2015) has noted that an abandoned project occurs when the project is not completed and ready for occupation/use on schedule. Pinto (2013) describes an abandoned project as one which: (1) has been discontinued or cancelled; (2) has failed to deliver on critical specifications; (3) has been completed with significant cost and time overruns; and (4) provides a poor return on investment (ROI). Carrero et al. (2009) focused on the negative impacts of abandoned construction projects on the Spanish coast and its regulation in the law. Project cancellation is avoided for many reasons, such as project managers’ reluctance to terminate a project (Schmidt & Calantone, 1998), missing perquisites (Kumar et al., 1996), or due to timing difficulties (Tadisina, 1986). Extensive research exists describing the role of decision makers in the project cancellation process (Gomes et al., 2001). The stage of the project and the consequences of cancelling it are important factors that project managers and decision makers must consider when deciding to continue or cancel a project. It may also be difficult for project and decision makers to make decisions because of the “too-much-invested- to-quit” syndrome. The literature describes this situation as entrapment, sunk cost effect, or escalation of commitment. Escalation of commitment is described as the “tendency of senior management to mentor their pet projects excessively, thereby allocating more resources than Hansen et al. 900 justifiable according to strategy or even sticking to a lost cause” (Biyalogorsky et al., 2006). At present, there is no consensus in the literature as to how decision makers make a kill decision (Green et al., 2003). Previous research shows that executives become overly committed (Kessler, 2000) and stick to projects beyond reason (Kirytopoulos et al., 2009). 2.2. Lessons Learned from Cancelled Infrastructure Projects The construction industry is considered to be a leader with regard to economic growth and it is important that the efficiency of practices in this sector be improved (Thomas, 2002). One way to improve practices in this industry is by learning from previous experiences. According to Weber et al. (2000), a “lesson learned” is the result of applying an action which may be positive or negative. Thus, both successes and failures are considered as sources of such lessons. Harrison (2003) describes them as “a good work practice or innovative approach that is captured and shared to promote repeat application, or an adverse work practice or experience that is captured and shared to avoid recurrence.” It is used to help organizations to achieve their business needs and goals (Weber et al., 2001). If done effectively, it will become a crucial element in organizations’ knowledge management (Caldas et al., 2009). There are five types of project reviews, i.e. evaluation review, gate review, audit, post-project review, and benefits realization review (APM, 2006). Post-project review is an important project review in which lessons may be learned and used to benefit future projects (Zedtwitz, 2003). It can be done once a project is completed or—as is the case in this study, when a project is terminated. A review will assess overall project success or failure, identify project challenges, as well as the pros and cons of such projects. In addition, Zedtwitz (2003) states that a review should capture lessons from both failed and successful projects. While this research examines Indonesia as a case study, the lessons learned may be of significance to other countries. 3. METHODS The research method used for this study is a case-based approach, coupled with comprehensive
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