🇦🇪UAE

أخطاء تقدير الجدوى الاقتصادية وقرارات الاستثمار الخاطئة (Feasibility Estimation Errors & Bad Investment Calls)

Updated: Feb 20262 verified sources

Definition

Masterplan feasibility depends on accurate infrastructure cost estimation, which 'plays a key role in deciding whether a masterplan development moves from the design stage to construction.'[2] If cost estimates are inaccurate—underestimated utility demands, missed Brownfield remediation costs, or overestimated market demand—projects proceed despite poor economics. Sunk development costs (design, approvals, enabling works) can reach AED 100-500M before construction; abandonment at this stage results in total loss.

Key Findings

Financial Impact: LOGIC-based estimate: Typical major UAE masterplan CAPEX: AED 2-5B; if 10-15% are ultimately cancelled or indefinitely paused due to cost estimation errors: AED 200-750M per project lost capital. Industry-wide (20+ major developments in UAE at any time): estimated trapped capital AED 4-15B from poor feasibility decisions.
Frequency: Every major masterplan feasibility cycle; typical timeline: 6-12 months from cost estimation to investment decision
Root Cause: Manual iterative cost modeling without real-time utility demand validation[2]; insufficient ground condition surveys in feasibility phase; outdated market demand forecasts

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Subdivision of Land.

Affected Stakeholders

Chief Development Officers, Finance Directors, Investment Committee Members, Feasibility Analysts

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

أخطاء المسح الجيوديسي والنزاعات القانونية (Survey Accuracy & Legal Disputes)

LOGIC-based estimate: DLD administrative fees AED 150,000+ per phase[1]; legal dispute resolution typically 10-20% of project value; construction halt penalties 2-5% of project CAPEX. For a typical AED 50-100M residential subdivision: estimated loss AED 5-20M from disputes + delays.

تجاوز تكاليف البنية التحتية والتأخيرات في التنفيذ (Infrastructure Cost Overruns & Construction Delays)

LOGIC-based estimate: Typical infrastructure overruns in MENA region 15-25% of estimated CAPEX; for UAE masterplans (avg. AED 2-5B): AED 300M-1.25B in overruns. Per substation miscalculation: AED 30-50M; per road/utility network underestimation: AED 50-200M depending on density and scope.

رسوم وغرامات عدم الامتثال لقسم الأراضي والممتلكات (DLD Non-Compliance Fees & Administrative Penalties)

Documented: Initial DLD fee AED 150,000+ per phase[1]. LOGIC-based estimate: Average project undergoes 1-2 re-submission cycles; cost per cycle: AED 150,000 (DLD fee) + AED 50,000-100,000 (re-survey + legal doc revision). Total penalty per phase: AED 200,000-250,000. For multi-phase developments (3-5 phases): AED 600,000-1.25M in compliance penalties alone.

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