Implementation of project management principles in Spanish residential developments.

There is a great desire by a small sector within the construction industry to use the concept of project management more than what it is being used (AEDIP, 2006). However, there are many other agents (architects, quantity surveyors and large contractors) that prefer the current status quo as it benefits them more (Garrido-Hernandez, 2002).

Nevertheless, the influence of the European Union on public procurement policies is considerable. This is especially important to the civil engineering branch of the construction industry, since there is, traditionally, a fundamental difference between procurement practices in the public and private sectors. Although it may take some time for the directives to be fully adhered, the legislative convergence in the European Union is unavoidable (Ferry, 1991; Janssen, 2000; European Union, 2005).

1.3. Research approach and methodology

The main purpose of the paper is to figure out how project management principles can be implemented in residential developments in the Mediterranean Coast of Spain. In order to comply with this goal, a basic model for the implementation of project management is proposed, where procurement and contractual relationships, company organisation, stages and preliminary questionnaires are displayed.

The paper is structured in four main sections. After introducing the project management background and its implementation in the Spanish construction industry, we present the context of the Spanish Mediterranean Coast as property market. Later on, our proposal is established: the real state process, the company organisation and the procurement and contracting strategies. Finally, our model is tested by two illustrative case studies.

The research described in this paper is part of an eight year exploration of the management of companies in the Spanish construction industry. This research comprised thoroughly cooperation with several firms covering all the construction process: real state companies, consulting engineering and architectural firms, and contractors. For this particular research, an in-depth analysis of a consulting company was developed in 2002 and 2003 for a fifteen month period. This company was not a usual one, just the opposite; it was carefully selected because of three important reasons:

* It dealt with the private residential housing market exclusively.

* The company handled all the real state process: from buying the land to construct the building. This implies that the company looks forward a project management approach to cope with the clients.

* Its position covered the southern Mediterranean Coast of Spain. Most of the foreign tourists are located in these areas and they are more open-minded to a project management approach than the Spanish citizens who are more comfortable with the traditional methods.

In order to carry on the research, an ethnographic approach was taken. The qualitative data and the empirical studies were the baseline for the later modelisation. Direct observations, interviews, internal reports, technical documents, company directives and other type of information were used, as it is frequent in ethnographic research. Our focus was, not only the regular operation of the company, but also each one of its residential development projects. This approach was previously used by some researchers, based on the former work of Bartunek and Louis (1996). They proposed a way to analyse a genuine situation: at least one person had to get involved in the fieldwork of study for a time, completely committed to the task, whereas another individual coped with the formal dealings and coordinated the activities of the former. The authors of this paper played these roles for this particular case study, meeting twice per month in order to debate methodological topics, analyse results and obtain conclusions. The "insider" stayed in the chosen company for a fifteen month period, whereas the "outsider" supervised and lead him through this period of time. This same methodology was followed by Engwall (2003) in order to prove how any project is linked to its context, and Engwall and Jerbrant (2003) to analyse how resource allocation is implemented in project-based companies. Finally, our model was applied to two selected case studies in order to test its validity.

2. THE SPANISH CONTEXT AND THE NEED FOR A PROJECT MANAGEMENT APPROACH

The value of property on the Spanish Mediterranean Coast has increased in 2005 by 15%, approximately (Rodriguez y R. de Acuna, 2006). Prices have risen from 1.700 [euro]/[m.sup.2] for new apartments, to more than 5.000 [euro]/[m.sup.2] in the more privileged areas such as Marbella (Ministerio de Fomento, 2001 and 2004; Rodriguez y R. de Acuna, 2006). The drastic shake up in urban planning, brought about by the introduction of new regional legislation on land use and urban planning, has opened up locked up land which has been so due to speculative property owners (Romero & Lorente, 1996; Modrego-Caballero, 2000; Fernandez, 2005). This shaping up of the system has curbed ad hoc speculative developments of poor quality and in turn has brought in the residential tourist from the coast to further inland where construction indices oscillate between the 1.500 and 2.500 [euro]/[m.sup.2] (Rodriguez y R. de Acuna, 2006).

There are two main types of developments regardless of the urban planning process: urban development and property development; a combination of the two is also possible. According to the Spanish Building Law (Ministerio de Fomento, 1999), the former requires a civil engineer or an architect to elaborate the urban project, whereas the later requires an architect and a quantity surveyor to carry on the building project; all these technicians are crucial players in designing, administering and executing the projects (Garrido-Hernandez, 2002). However, a first approach to project management highlights a project manager as a technician who knows about planning, organising, designing, constructing and controlling the project on time and within budget (Kerzner, 1989). Nevertheless, this approach is not good enough for urban developments.

On the Mediterranean Coast there are a lot of small companies that work on a network basis (Gonzalez et al., 1998). Each one has its unique function and all together got the work done. Most of the work undertaken is by traditional contracting. These networks are very extensive and span out to many sectors in different industries, e.g. banks, estate agents, lawyers, local authority officials, architects, quantity surveyors or accountants. If a network is well established and extensive, then its web has a large catching area. The newcomer within the catching area will have to touch base with at least one of the members of the network.

A company that tries to implement project management in the sector faces a hostile environment and needs to change its position in order to be able to survive. Maybe become an entire network or as close to one as it could get. This means that the project management firm has to be the first port of call for any would-be investor. The project management company has to play the role of the bank, estate agent, lawyer, urban planning consultant, architect, quantity surveyor and accountant, as well as all the traditional roles associated with project management.

Most of the Regional Land Laws in the Spanish Mediterranean Coast (e.g. Andalusia, Murcia and Valencia) grant the figure of the urbanizing agent as the urban developer that acts instead of the public administration (Romero & Lorente, 1996; Modrego-Caballero, 2000; Fernandez, 2005). Some companies are offering their services in doing the entire development process for the project. It goes from the conceptual stage to hand over, including land acquisition, urban planning, building approval, design, construction, marketing and selling. Some companies have been so successful that they have even included financing their own projects.

Currently, there are lots of possibilities. Many projects on the Mediterranean Coast are being planned around golf courses already constructed or in construction. These courses have areas of land, which will be developed, into private residences for foreign golf enthusiasts. These plots of land sit on large areas, which have been urbanised, or land, which has been authorised by the municipal planning regulations. This land is ready for development, needing the infrastructure works to be carried out on them prior to building houses. Developers, who sell off the plots but have no real knowledge of construction, own these large developments. They know their clientele will be foreigners retiring to the Mediterranean Coast because they have carried out extensive marketing that ascertains this. They have no time or experience in managing projects and after seeing the results of traditional contracting, they are now turning to project management as a more comprehensive and complete way of handling the projects.

It has to be taken into consideration that Spain is the second European country with the largest amount of visiting tourists: fifty million. Of these, nearly one million have bought houses in Spain; 80% of them are Germans and British citizens (Kozak, 2002; Instituto Nacional de Estadistica, 2003; Ministerio de Economia, 2003). It is estimated that in the next years there will be an increase of foreign residents setting up second homes in Spain (Pellicer et al., 2006). It is not only the pensioners who are looking at setting up homes abroad, but with the access to current e-commerce and associated technologies, many young families are leaving their native countries to go abroad and work at home in their new country of residence. To buy a second home in Spain is a good investment; Spain belongs to the Euro Zone, which implies a better comparison of prices, low risk and low interest rates (Pellicer et al., 2006).

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