Reasons for failure: In its early stages the project was consistently rated as green meaning that it was officially assessed as proceeding to time and to budget as per the auditors. Later, two reviewing committees put the project’s status at "red". But the auditors found that these reviews were sidelined or not always acted on. Officials had failed to follow basic project management principles, or establish a realistic budget, timescales, monitoring and governance. All of these could have been avoided if good practice in project management had been followed.
Project: Unique business model of allied companies
In this project, textile producers and commercial real estate allied with ITAT in China.
Cause of failure: In practice this model had no competitive edge: products and brands were not tailored to the consumers’ tastes. Commercial real estates were not promising, but several foreign funds still poured money into this company.
Costs: Blue Ridge China, famous for its aggressive approach, made an initial investment of $50 million in ITAT at the end of 2006. In March 2007, Blue Ridge, Morgan Stanley and Citadel together invested another $70 million. In total, Blue Ridge China has invested $80 million in ITAT. No doubts were foreseen about the defects of ITAT’s commercial model. Fund managers passed the risks to individual investors (8). Consequences: In the end, the Hong Kong Stock Exchange did not approve this IPO. The whole operation fell apart.
9) Project: Eminent domain use projects in US
Tax-hungry bureaucrats and land-hungry developers claimed that the use of eminent domain is necessary for economic development. They promised everything from high-rise condominiums to trendy shopping malls, all in the name of more taxes and jobs. There is a strong incentive for cities and developers to over-hype the benefits of individual private development projects involving eminent domain in order to acquire political and public support. But it turns out that many of these projects were failures. Reasons of failure: Although completed, these simply did not live up to the grand promises and projections that were used to justify the use of eminent domain. They produced fewer jobs and less tax revenue than expected- sometimes less than before the project was built. Quite often, the public’s financial costs in the form of new debt, subsidies and other spending were a way too high. Also, areas that were supposed to be revitalized either remained the same or got worse. Incomplete projects resulted from a fall in financing, backing out of developers, change in market conditions and prevailing of incompetence and insecure tenants (9).
