REPORT ON THE HERITAGE CITY PROJECT
Table of Contents ................................................................................................. ..................... 2 1. Introduction ............................................................................. ..................................................................................... .................................................. ..................... 2 2. The site ........................................................ 3. Appointment of consultants for the project ......................................... ............................................... ...... 7 4. Project Cost ...................................................... .................................................................................. ........................................... .............. 10 5. Planning process ............................................................ ........................................................................................ ............................. 10 6. The master plan ............................................................. ......................................................................................... ............................. 13
................................................ 18 7. Project Implementation and Governance ................................................ ......................................................................................... ....................... 20 8. Project Funding ................................................................... ................................................. 21 9. Concluding Remarks and Way Forward .................................................
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1. Introduction While the principles and wish of Government, especially that of the Prime Minister, to develop the Heritage City is not being questioned at all, the purpose of this report is to draw urgent attention to major flaws in the way the Heritage City Project is currently being conceived and developed through the Heritage City Company Ltd. The report highlights key parameters, conditions and assumptions that have been omitted and understated in the site identification and location, conceptual and architectural design as well as the current process adopted for its implementation. It is meant to alert policy makers of the risks, loopholes and costs associated with the current development approach adopted by Heritage City Company Ltd. If unaddressed at this stage, it can lead to major cost escalation, result in a poorly planned development for such a prestigious and landmark project and finally become a major embarrassment for Government.
2. The site The selection of the site for the Heritage City project is a key issue that needs to be carefully analyzed. The site chosen lies between 2 rivers and is adjacent to the Bagatelle Dam under construction. To give access to the site, land will need to be compulsory acquired, though SLDC owns over 2000 acres of land. Land will need to be acquired for water supply and sewerage disposal. The site slopes from 367m in the East to 296m in the East, which is a 71m drop. This will require significant cuts and fills and will have incidence on the cost of the project. Furthermore, storm water management could be a serious issue if these aspects are not properly considered. The proximity of Bagatelle Dam is another issue that needs to be closely looked into when dealing with storm water management. Overflow can create serious flooding issues if the storm water management plans are not properly designed and engineered. Surprisingly, the concept engineering plan clearly specifies that: i.
River flood levels are not available, and therefore a free outfall is assumed; and
ii.
Flooding due to potential failure of the dam is not accounted in the design.
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We would have assumed that such basic characteristics and prevalent conditions of the site would have been taken on board before formulating advice to Government on the suitability and relevance of the site for such a landmark development.
In addition, it is important to underscore the concerns associated with the current master plan of the Heritage City Project. These include the limitations associated with scope of integration with other developments such as the Highlands Smart City, the risk of flooding owing to the topography of the current site identified and proximity of Bagatelle Dam, the extensive offsite road works associated with the current site as well as costs associated with land acquisition to allow accessibility. These are morefully described below. (a) The layout of Heritage City is more inward looking rather than outward looking which is better suited for a site with Government Services. It means that it eliminates any linkages with other developments such as the Highlands City development. The master planner also advised that the site is enclaved by rivers Cascade and Terre Rouge and the Bagatelle Dam acts like a man made barrier making integration into
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the larger Highlands City precinct difficult. It is the view of the masterplanners that Heritage City at its current location will function as an island site with an autonomous self-contained character rather than as a government/civic component of the larger Highlands Smart City development.
(b) Risk of flooding due to Bagatelle Dam exists. The risk can only be quantified through a comprehensive risk assessment of the dam design and construction. Mauritius has no prescribed guidelines on dam and/or dam spillway sizing with regards to Probable Maximum Flood (PMF) or Regional Maximum Flood (RMF). The guidelines of South African National Committee on Large Dams (SANCOLD) are usually relied upon for fixing such design criteria and only a detailed review of the design of the dam can conclude if the possibility of having human settlements downstream of the dam has been considered in the design process of the dam. There seem to be no evidence of such a study having been commissioned for the development downstream of the dam.
River
Heritage City Site
Bagatelle Dam River
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(c) The current location of the Heritage City will require extensive offsite works for access to the site. The traffic level of service on the M1 motorway at Reduit from traffic generated by Heritage City will considerably worsen and this will require extensive infrastructure works to mitigate such traffic impact. In reply to the question about locating the Heritage City at the location originally foreseen in the SLDC masterplan for the “New Administrative City” next to Aurea development at Highlands with frontage on the M3 (Ebene – Verdun – Terre Rouge Link Road), the masterplanner and the traffic engineer have confirmed that this will be a better option from a traffic impact perspective and will require less offsite infrastructure works. The initial capital costs for offsite works at Highlands will also be considerably less than at its currently planned location.
(d) The current location of the Heritage City will require land acquisition of private lands for the construction of roads to access the site of Heritage City. No such acquisition is foreseen if the Heritage City is constructed at Highlands, at the site of the originally planned “New Administrative City”.
The Correspondence from SLDC and LUXCONSULT is at Annex 1.
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The selection of site for the Heritage City project is questionable, taking into consideration site grading, the 2 rivers bordering the site, and most importantly the proximity with Bagatelle Dam. The Conceptual Engineering Plans does not take into consideration any potential failure of the dam.
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3. Appointment of consultants for the project The process for appointment of main consultants for the master planning and design of the Heritage City project raises serious doubts as to whether the right process has been followed. For a project of the scale, magnitude and scope of Heritage City (over 300 Arpents), the selection of the project team is critical to ensure the successful planning, design and implementation of the project. It is critical to assess the credentials of the project team members and past projects designed and implemented. The project team should not be limited to master planners and engineers, but the contributions of economists, financial analysts, quantity surveyors and other relevant trades in the planning process are critical to evaluate the financial viability of the project. In the case of the Heritage City, the process of hiring STREE Consulting as the principal agent is completely opaque and dubious. Below is a sequence of events that induces anyone to question whether the proper process of hiring the right consultants has been followed: 1. On 12 February 2016, the Directors of Heritage City were informed that the services of BDO were retained by the Ministry of Financial Services for the financial modelling of the proposed Heritage City project and that BDO had submitted proposals for a concept master plan for the project in collaboration with STREE contracting, an engineering firm based in Dubai. 2. On 17 February 2016, BDO presented Saeed Ahmed Saeed, CEO of STREE to the Board of Heritage City and BOO and STREE did a joint presentation of Heritage City concept master plan. 3. On 4 March 2016, the Board was informed that pursuant to the High Powered Committee recommendation, which was approved by Cabinet on 2 March 2016, Government has agreed to procure the services of STREE for: i. The detailed masterplan and engineering design for infrastructure works ii. The government offices schematic design on a Government to Government basis with the Government of Dubai. 4. STREE'S fee proposal is as follows:
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i.
Detailed masterplan for 300 arpents and engineering - USD 1,840,000 (sent on 12 Feb 2016). This fee proposal had a list of major exclusions e.g. landscaping, preparation of architectural guidelines, visuals etc. This was approved by the High Powered Committee.
ii.
Fee for doing the detailed landscaping design (excluded from master planning fee) - USD 1, 912, 000, which is more than their fee for doing the detailed masterplan and engineering itself. Their fee for the detailed master plan and detailed landscaping design altogether comes to 3,752, 000 in total. (Note: LUXCONSULT has been appointed for the master planning and detailed engineering design for SLDC’s Highland Project, over 2000 Arpents of land, for approximately USD 2 million) .
iii.
Thereafter, STREE consulting has been sending several proposals for: a. Schematic design for Government Offices – USD 2.5m b. Detailed design and preparation of tender documentation for Government Offices c. Detailed design of Parliament Building d. Schematic Design for Townhomes and Villas e. Detailed design and preparation of tender documentation for townhomes and villas f.
Detailed design for Heritage Square and Mixed-Use Complex, including interior design
iv.
Total fees quoted by STREE, including concept master plan, works out to approximately USD 18,657,000 (MUR 664m), and the fees have major exclusions such as site supervision and reimbursable expenses (flights, accommodations, etc.)
v.
No local consultants are involved in the project and STREE has refused to enroll any
Based on the above, there is no visibility on the professional fees that will be incurred on the Heritage City Project. "#$% & .
Only STREE’s fees is known to be nearly USD 19m. On top, there will be need to include other professional fees for site supervision, project management, legal and notary fees, survey fees, compulsory acquisition of land, finance costs and others. Projects in the scale of Heritage City require multi-disciplinary skills. It is key that all the trades are not allocated to the same consultant, otherwise there is no control on design quality and costs. It is imperative to confirm if a letter of engagement has already been awarded to STREE consulting for the above services.
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4. Project Cost STREE has estimated the total project cost for Heritage City to be USD 800m and this does not include major off-site works such as CEB sub-stations, water connection, access road connecting Heritage City, compulsory acquisition of land.
STREE has no knowledge of the local context, be they in terms of planning and constructions costs. The feasibility of the project, including market analysis, cost, revenue expectations, and financing are not clearly defined; not to say unknown.
5. Planning process
Planning is a highly iterative process whereby plans are designed, reviewed, redesigned and validated by the client in line with the objectives and financial sustainability of the project, before a plan is finalized and accepted. A master planning process has 5 key stages, as illustrated in the below table:
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Stages
Physical Planning
Economic Planning
1
Designation of prime consultants for the project, including land planners, architects, engineers, etc Boundaries, Access and Views Topography, slope, drainage Vegetation Cover and Characteristics Environment and Geological Features Historical, Archaelogical & Cultural attributes Wind, temperature, rainfall, sun path, & humidity Zoning, land use, & permitting issues Water, sewage,power, communications
Economists, Financial Analyst
– Project Definition
2 – Analysis / Site Reconnaiss ance
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3 – Conceptual Masterplan workshops
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4 – Preliminary Master Plan Refinemen t
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– Final Illustration Master Plan
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Land use suitability and capacity studies of gross area available for development Site development diagram and density studies Preliminary Phasing Plans Preliminary quantity take-offs relating to the site infrastructure and special features Review plans with planning authorities & address comments Refine masterplan and develop specific site plans Architects document architectural styles, alternatives, and establish design criterial Architectural massing studies are conducted Engineers study soil suitability, water & sewer, stormwater management & erosion control, alternatives for water supply, waster treatments, power supply, traffic impacts, etc Illustration of special characteristics of the project Detail location of facilities o Residential o Commercial o Recreational o Circulation Pattern (Vehicular systems, parking, service areas, trails, pedestrian systems) Landmarks, Vistas, Historical Sites Utilities & Maintenance (water supply, sewage treatment, surface water management, electrical supply/distribution, solid waste disposal)
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Review & inventory of existing market conditions Define target market and project elements Identification & benchmarking of competing and comparable projects, size, types, pricing, etc Specify development programme, product types, and amenities Timing of market support for various products
Work with planners to refine initial programme Preliminary development costs Project revenues on early master plan concept Alternative cash flow analysis (to derive the highest and best use from the site)
Refinement of financial analysis Review cash flows Alternative development strategies
Detailed project parameters (mix of components, pricing, etc) Revised cash flow, costs and revenue projections Absorption sensitivities Key cost variables Documentation of market and financial reports
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Below is a list of fundamental questions that need to be answered to ascertain whether the proper planning process was followed: i.
Was there a project brief given to STREE consulting and who prepared the project brief?
ii.
Was there a real estate market analysis carried out before defining the components, notably the residential real estate, mixed use and commercial components, to support the project brief?
iii.
Was there a proper site due diligence out prior to the master planning?
iv.
Were there design workshops held, and if yes, who formed part of the workshops?
v. vi.
Were the financial aspects validated at each stage of design? With whom STREE has been validating the plans at each stage of design?
In the case of the Heritage City project, there is no sign of the planning process being diligently followed. it seems that the project has been purely consultant driven. As a matter of fact, as at to date there is no management structure in place at the Heritage Company Limited. A project of this size, scope and magnitude requires that the process of the concept and design plans are adopted in line with normal international standard. There are serious question marks currently on the methodology, approach, planning, development and implementation processes adopted so far by Heritage City Co Ltd. Fundamental aspects of master planning that such a development project warrants have simply been omitted, ignored or under-evaluated. If these issues are not addressed at the initial stage, it may seriously compromise the whole development.
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6. The master plan
A preliminary analysis of the masterplan prepared by STREE Consulting reveals a number of shortcomings, that are not deemed to be in line with sound urban planning practices. Below is a non-exhaustive list of 10 weaknesses found in the master plan: i.
Syndrome of suburbia
The master plan, in its actual form, depicts a syndrome of suburbia type development, which the new generation of urban planners are normally against. There is only one square in a 336-acre development.
336 acres of development gives the opportunity of creating several squares if the quartermile rule is applied. Based on this rule, a 145ha development can easily yield around 3 squares. In this development, there is planned only one square within the elliptical zone.
In urban planning, if the street and walkways are well defined, they become excellent open spaces. One should not rely solely on squares.
ii.
Land Parceling Plan Vs Master Plan
The plan looks like a land parceling plan, on which uses have been superimposed. The ellipse looks to be at the centre of the attraction and the remaining seems to have been given less importance.
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iii.
Street networks
The network of streets is not properly defined in the master plan. This is an essential component of a good master plan. In the conceptual engineering plan, I read that there will be 8 types of streets: •
A 32m, 6 lane entry boulevard from M2 to the Parliament House – Speed limit 70km/hr
•
A 30m, 4 lane boulevard as the main peripheral – Speed limit 40km/hr
•
12 to 16m local access roads – Speed limit 30km/hr
The hierarchy of streets needs to be properly established and the circulation flow/pattern defined, based on proper traffic impact assessments, the moreso that the project is almost next to existing developments.
A proper network of streets should also show the interaction between vehicular and pedestrian accesses. Nothing in this respect is shown in the masterplan, including streetscapes.
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Mixed-Use development is not only about having many uses in one developments. In fact, in it more about how each use will be interacting with each other
The master plan does not show a proper vehicular and pedestrian circulation plan. The pathways are not defined. All these are fundamental elements of a master plan. This raises question on the process for approving the master plan.
iv.
Access to site
The masterplan and Concept Engineering Plans show 3 accesses to the development. However, this is not supported by proper Traffic Impact Assessment; not only within the project, but on the roads/highway to which the site will be connected.
v.
Floor Area Ratio (FAR)
Based on the figures provided, it can be seen that a Floor Area Ratio of around 0.5 is derived for the project. This may not be the most efficient planning if this is the case.
According to urban planners, a walkable urban development should aim for an FAR in the region of 1.5 to 3, and yet have many open spaces.
vi.
Parking
As per the master plan, 4 spaces are earmarked for parking spaces in the development. In addition, provision is made for a single-storey basement parking under each building.
The masterplan, however, does not provide a detailed analysis of parking requirements taking into consideration the carrying capacity of the master plan. If this is not done, there is a possibility of ending up like Ebene City where poor parking provision has been made and this generates an eyesore with reckless parking. "#$% & '+
Furthermore, the geotechnical survey of the site was conducted much after the conceptualization of the master plan. The results of the survey and the topography should be considered, prior to finalizing the parking plans.
vii.
Architectural vernacular
Defining the Architectural style (or styles) is key in a master planning exercise. Nothing as such is defined in the master plan. The scope of work of STREE, surprisingly, excludes architectural coding. This may lead to different design styles which may not be in harmony with each other.
viii.
Landmark and Vistas
The master plan gives no consideration to any landmark and vistas that could otherwise have been possible. These are key elements in a development of this scale which, in fact, give a sense of direction.
ix.
Sustainability – natural lighting and ventilation
Unless done but not presented, there is no analysis and consideration given in the master plan to sustainable development principles. Sustainability is not only about having green spaces and renewable energy. It should be first and foremost embedded in the design, such as natural lighting, natural ventilation, etc.
x.
Phasing st
As planned, the 1 phase will have the Government buildings, private commercial buildings (yet to be defined) and some residential components. The square will not be developed and the retail mixed-use is not found in the first phase. The private commercial spaces are yet to be defined.
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It is important to know what will be the retail offerings, including retail F&B and retail services, when the Government offices, parliament, convention centre, and residential units are completed. Otherwise, users of Heritage City will be amidst a field, with not access to retail facilities. The above is a non-exhaustive list of planning issues found in the master plan, which again raises question on the experience of the master planner and the planning process in terms of review and validation.
In short, the current approach is flawed and revealed a total lack of expertise available to lead such a project. Ideally, the development of such a project as Heritage City should have adopted an integrated planning approach which is depicted below.
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7. Project Implementation and Governance As at date, Heritage City Company Limited does not have any permanent staff or an organization structure in place. There is only a Board of Directors, meeting on a monthly basis. Serious concerns are raised on the way the project is being handled and managed. In the absence of management staff and a CEO, it is clear that the project is being driven blindly by Stree Consulting with no due diligence or checks being exercised on the proposals being put forward by the consultants. Government, through cabinet, is therefore being called upon to endorse the recommendation of Stree with no assurance that the proposals have stood the test of minimum scrutiny. On 02 August 2016, a Board Meeting is convened with defined agenda wherein one of the items is for STREE consulting to present the detailed plans of one of the components of the project. During the same meeting, the Board is requested to resolve the implementation of the landscaping plan for the Heritage City project; while this was not part of the Agenda. In addition, the Board is requested to appoint Stree for the detailed design works with no formal board papers being circulated. This clearly flouts basic principles of good governance, accountability and transparency. It is evidently clear that the Chairman of the Board and most members of the board are being instructed to act simply as rubber stamp directors with no possibility of questions being asked. A copy of the Agenda is at Annex 2. This is a clear indication that the project is not being managed properly and will lend the Board, the Government, and the project into serious troubles. The Heritage City Co Ltd has a duty to advise and make recommendations to Government on the implementation of such a project. The current mode of operation is that Government (Cabinet- considered as shareholder) seems to direct the Board, which does not have any management staff. The Board is seen as a rubber stamp of recommendations made by STREE Consulting. This is dangerous as an approach and flouts all principles of governance. The Board should be fully satisfied with the proposal and thereafter make its recommendation properly to Government on the best design and concept plan having regards to all aspects of master planning. "#$% & '.
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8. Project Funding It was initially understood that a G to G arrangement was proposed on the basis that the Dubai Government was going to advance funds for the construction of Heritage City. It is now almost clear that the Dubai Government will not be funding the project.
At its Board Meeting on 2 June 2016, the Directors were informed that the Government of India will fund the construction cost of the parliament as well as the infrastructure works; not the consultancy fees. However, the condition is that only Indian contractors will have a right to tender for the works.
The cost of Heritage City has been broadcast as being USD800m with not a cent being contributed by the Government of Mauritius so as not to increase public debt.
Based on the above, if Government is not receiving any funds from Dubai Government, should STREE consulting be appointed for almost all consultancy services for the project?
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9. Concluding Remarks and Way Forward It is to be reiterated that the aim of this report is not question Government’s decision for the implementation of the Heritage City project. However, for the proper implementation of the project, it is critical that all the issues flagged in the report are addressed at outset to avoid any future surprises, which can occur financially and from a planning perspective. Any mishap can compromise the implementation of the project and can become a serious nuisance factor for Government. i.
It is being recommended that Government takes a few more weeks to properly analyze all issues, set up the appropriate management structure at Heritage City Co Ltd or alternatively vest the project in State Land Development Company which is already properly staffed for the implementation of the Heritage City project .
and take the required decisions, before breaking grounds for the Heritage City project. As a way forward, it is proposed that the following are assessed without undue delay; ii. iii.
A Due Diligence on STREE Consulting. An evaluation of the technical and financial proposals of STREE consulting and the agreements signed.
iv. v. vi.
Review of the Planning Process followed by STREE Consulting. A proper site due diligence to assess adequacy of site and alternative locations. Review of the Master Plan with industry experts to assess the best location and best use of the land.
vii. viii. ix. x.
Site selection Uses and real estate mix Architectural design criteria Phasing
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xi.
Setting up the management structure of Heritage City Co Ltd or alternatively using State Land Development Company which is already well staffed for the implementation of the Heritage City project .
xii.
Financial modelling for the project and financing plan.
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