MARKET WATCH
The natural beauty of San Juan attracts throngs of visitors each year, providing steady business for hotels, restaurants and other tourist attractions. But the city is more than a tourism hub for Puerto Rico—it’s also the island’s main manufacturing and financial center.
The city’s transportation infrastructure helps facilitate commerce. San Juan has a bustling, modern port, and is served by two nearby airports, including the Luis Muñoz Marín International Airport, which ranks as the busiest airport in the Caribbean.
In recent years, San Juan has expanded into pharmaceutical manufacturing—an industry that has become big business for Puerto Rico. The island’s pharmaceutical manufacturing sector exports medicines worth about $100 billion at consumer prices each year.
But like the rest of the world, San Juan is grappling with economic challenges. In August 2008, the unemployment rate for Puerto Rico reached 12.6 percent. And even the stalwart tourism industry is limping. Reuters reports American Airlines, which controls 60 percent of the traffic out of San Juan, cut half its 38 daily flights from the U.S. mainland in mid-2008.
SOURCES: airport-technology.com, Piribo Ltd., Associated Press, Reuters
FACTS & FIGURES
Population: About 414,000 people live in San Juan, according to 2006 U.S. Census Bureau estimates. That’s a significant portion of Puerto Rico’s population, estimated at 3.9 million.
A territory of the United States, Puerto Rico is a self-governing commonwealth. More than 37 percent of San Juan residents are living below the poverty level, compared to 13 percent in the United States overall.
Language: Spanish is the main language spoken here, followed by English.
Currency: U.S. dollar (USD)
1USD = ¥95.58
1USD = €0.79
PUERTO RICO CAPITOL BUILDING
ALL FIGURES QUOTED ARE IN U.S. DOLLARS UNLESS OTHERWISE NOTED.
IT'S KNOWN as La Ciudad Amurallada (The Walled City), but San Juan is hardly closed off from the outside world. That openness has sparked a flurry of projects across sectors ranging from tourism to pharmaceuticals. Yet the island's capital city is still struggling to adopt the kind of project management practices that could ensure its status among its booming Latin American neighbors. And Puerto Rico's close economic ties to the United States aren't helping matters as the superpower slumps into a full-blown fiscal funk. In August 2008, for example, the unemployment rate in Puerto Rico rose to 12.6 percent
That harsh reality is changing the job requirements of San Juan's project managers. Increasingly, as labor and financial resources dwindle, they are compelled to do more with less.
“Recently, project managers are faced with reduced budgets, making project management more challenging,” says Will Matos, project manager for Barry-Wehmiller Design Group, a San Juan company serving the country's pharmaceutical sector. “Not only are project managers being held accountable for delivering the project on time, but also [for] paying closer attention to project cost control.”
ACROSS THE AGES
San Juan's project landscape is both steeped in historic and forward-looking investment. Founded in 1521, it's the second-oldest city in the Americas, making it a hot spot for historic preservation projects. Iglesia San José, known as one of the earliest religious structures built by the Spanish in the New World during the 16th century, is currently undergoing a meticulous reconstruction, for example. At the same time, the city is also home to myriad efforts aimed at modernizing the infrastructure, including the Tren Urbano metro project.
BITTER MEDICINE
The pharmaceutical industry can spell big business and mega-projects in San Juan and the rest of the island, but the struggling economy and quality-control issues threaten the city's ability to make further inroads into the industry.
In 2008, an investigative report by the Associated Press found that lack of oversight at Puerto Rican facilities had led to the production and distribution of tainted medication.
Economic problems have plagued the industry, too. Bristol-Myers Squibb Co. has closed two plants in the country.
Both of these developments are potential blows for an industry that has otherwise been kind to Puerto Rico. The island manufactures $35 billion in pharmaceuticals annually, and in the United States alone, 13 of the 20 top-selling drugs are made in Puerto Rico. And mega shipping company UPS recently announced a project to build a state-of-the-art facility in San Juan to help serve the industry. Slated for completion in 2009, the 150,000-square-foot (13,900-square-meter) plant will be equipped to store perishable pharmaceutical and biotech products.
“Puerto Rico is among the leading markets for pharmaceutical and biotech product research and production worldwide,” said Jorge Castillo, UPS Puerto Rico country manager, in a press release. “Our new facility will strengthen our distribution network and enrich customers’ opportunities for growth.”
No matter what the sector, project managers are left to contend with a leaner future.
“In San Juan, depending on the industry, there are different challenges [for project managers],” says Jesus Rodriguez, PMP, president of the PMI San Juan Puerto Rico Chapter and project management office quality assurance manager at First BanCorp, San Juan. “In pharmaceuticals, they have to deal with the risk of closing plants to move operations to other places that are more cost-effective. For other industries, the economic crisis is forcing project managers to do more effective cost control without affecting the quality.”
THE TALENT BANK
From his vantage point implementing project management methodology for technology projects at First BanCorp, Mr. Rodriguez has observed a growing need across the city for project managers in the service industry and government.
“Organizations need to comply with standards and regulations and also have good financial results, and project management is one of the ingredients that they need to have in their list,” he says. “They need better results and [they need to] run their projects more effectively by making better use of their resources and improving communications among all participants of the project to make sure that all aspects of the project will be addressed and satisfied.”
Popular, a San Juan-based financial institution, is a high-profile example of the struggles faced in the services industry. The company, which also operates in the United States and Latin America, posted a $669 million loss for the third quarter of 2008. The largest bank in Puerto Rico—with more than 300 branches and offices—Popular saw third-quarter profits in the country drop 56 percent.
Economic fluctuations create additional pressure for project managers, but they also provide a wake-up call to companies that now place a premium on disciplined approaches to business.
“In a nutshell, it's very, very challenging,” Mr. Matos says, ticking off a list of issues, including tighter schedules aimed at delivering the products faster to market, cost control, managing contractors, reassignment of resources and forecasting working hours “on a weekly basis, down to the minute.”
Tomás Céspedes, senior project manager at IT solutions provider Truenorth Corp., San Juan, says one of the greatest shortfalls in many local projects is “the lack of details in the statements of work, and the lack of a project charter signed by the customer. In San Juan overall, the level of uncertainty at the beginning of most projects is high.”
STICK TO THE SCHEDULE
The global economic crisis is exacerbating the scheduling shortcomings in the island's project management community and further threatening on-time, on-budget completion of projects.
”[Project managers] treat project schedules in a very light way. This kind of practice leads to unreasonable, unrealistic, useless schedules,” says Carlos Colón Riollano, PMP, project management practice director for project management consulting firm Nagnoi Inc., San Juan. “Sponsors and organizations are trying to locate and pursue project management professionals who truly manage and understand these scheduling practices to avoid these unpleasant scenarios.”
Along with scheduling expertise, project managers with a solid tech background and leadership skills are turning out to be a hot commodity even in San Juan's struggling economy. “Professionals with a combination of project management skills and a technology background have remarkable interest,” Mr. Colón says.
IMAGE COURTESY OF PUERTO RICO INDYMEDIA
UNDER PROTEST
To support its vibrant tourism industry, San Juan has plenty of projects designed to attract visitors—but the efforts also frequently draw the attention of protesters.
That's the case with Paseo Caribe. The $250 million mixed-use project combines commercial and residential areas with cinemas, restaurants and more than 30 retail stores. Although the project originally had a completion date set for fall 2005, Paseo Caribe's luxury condo buildings still weren't complete as of October 2008. The slow pace didn't stop dozens of protesters who set up camp at the Paseo Caribe project site for more than a year.
The activists contend Paseo Caribe is being constructed on public land that was illegally sold by the government to a private developer, blocking access to the historic San Geronimo fort. They also argue the government has allowed too many permits for developments close to the shore.
Puerto Rico's Supreme Court saw otherwise. In January 2008, the court sided with the developer and declared Paseo Caribe's construction site as private property, with the caveat that the historic fort that had since been shuttered to the public must be reopened.
The environmental movement in Puerto Rico was in part prompted by people's frustration with uncontrolled development, Javier Arocha, Puerto Rico's secretary of the department of natural and environmental resources, told the Miami Herald in July. For example, when a Courtyard Marriott expansion was proposed in Isla Verde at a beach outside the San Juan airport, protesters dug in their heels and set up outside the site for two years.
And the protests are taking their toll, according to the paper: “Developers believe they are facing political activists who are against development and capitalism, and are costing Puerto Rico untold millions of dollars as project after project is either scrapped by the government or stalled in the courts.”
ALSTOM LHB CORADIA LINT: PROPOSED CANDIDATE TO SERVE THE SAN JUAN-CAGUAS RAIL
TRAIN IMAGES COURTESY OF WIKIPEDIA
More organizations are also requiring Project Management Professional (PMP®) certification for project managers, Mr. Céspedes says.
That, in turn, is increasing the number of local project management education providers.
“Ten years ago there was only one private project management education provider. Today there are four PMI Registered Education Providers and more than five independent project management education providers,” Mr. Rodriguez says. “This is without counting universities that have project management courses in their curriculum. There is one [Universidad del Turabo] that provides a master's degree in project management.”
TRAIN TIMETABLES
This is an island that likes its cars. Puerto Rico has the third-highest number of motor vehicles per inhabitant in the world with about 2.8 million vehicles traveling on 16,000 miles (25,750 kilometers) of road in Puerto Rico daily. That has led to some serious traffic jams.
And the roads between San Juan and the city of Caguasare are a prime source of the congestion. To remedy that, the government is planning a 12.4-mile (20-kilometer) rapid rail line between the two cities, which would connect with the Tren Urbano, an 11-mile (17.7-kilometer) commuter train in San Juan.
Developers hope the Caguas to San Juan rail line will avoid problems that plagued Tren Urbano. When it opened in late 2007, the total cost was $2.23 billion—more than double the $1.09 billion budget suggested during the project's planning phase. What's more, the project was finished four years behind schedule.
ON THE MAP: SAN JUAN, PUERTO RICO
The demand is fueled by the business community's increasing understanding—and appreciation—of the skills required by today's project managers.
“The traditional thinking in some industries like information systems was that a good technical [person] would be a good project manager, or that having strong technical skills will add value to the project manager,” he says. “The truth is that it helps, but, how technical should a project manager be? There is no definitive answer for that question, but every one is realizing that leadership and [people] skills are more important for project managers.” PM