Despite tough economic times, Oman is building for the future. Developments in construction, hospitality, telecommunications and tourism mean the Sultanate stands on the brink of a new era. Team Y reports on some of the projects.
Outlandish towers that reach for the skies, ostentatious buildings that almost defy the laws of physics, and gilded hotel rooms that even the affluent deem ridiculous – it seems the GCC nations take things too far when it comes to showing off their wealth.
But that’s not how we like to do things in Oman. Rising from amid mountain ranges – not monolithic steel and glass buildings – the Sultanate’s cities encompass a platform for growth that has turned the nation into a powerhouse, one that offers both local and foreign patrons equal bites of the development cherry.
This week, we look at some of the top projects that should help transform the face of Oman – and subsequently, elevate its position not just in the GCC but across the entire Middle East.
Oman’s development dates back just a few decades – to 1970, to be exact – since it began expanding on its greatest assets: oil and gas.
Peaks and troughs have hit these volatile sectors many times over since, with dropping prices; to about US$25 per barrel of crude in the early 2000s, then a rise to a stout US$142 in mid-2008 before finally crashing down to less than US$20 a barrel in 2015.
While recent times mean a tough slump in the economy for all countries across the GCC, including Oman, the Sultanate edged out all of its GCC neighbours in the development of its construction sector in 2018 – a feat that the nation will extend into 2019 as well.
As per a report published by BMI Research by Fitch Ratings – a research firm that provides macroeconomic, industry and financial market analysis – the Sultanate recorded a growth of 10.4 per cent in the sector in 2018 as opposed to the 7.1 per cent shown by the other GCC states.
The number is expected to increase to 11.5 per cent this year, when compared to the predicted 7.3 per cent that our neighbours will witness.
Shahswar al Balushi, the CEO of the Oman’s Society of Contractors says: “We’re keeping our hopes very high in the construction sector for 2019 as we had a relatively better year in 2018 than the years before.
“This can be put down to the slowly recovering oil prices but more so to the success of the taxation systems and the eradication of the subsidy system to help fund more money into the government.”
All of this has translated to a plunge of 36.1 per cent to RO2.04bn in the budget deficit from January to October 2018 and a surge of 32.2 per cent to RO8.69bn in the total revenue of the Oman government – a reprieve of sorts after four tough years.
All of this means Shahswar can say that the government isn’t focusing on just one sector.
“We hope to improve across a range of sectors in 2019. Several projects are already underway and are expected to finish their initial phase of implementation by the end of the year.
“These are not just in the construction sector. For instance, the telecom and the hospitality industries are also booming in Oman – and while that translates to more facilities in their respective sectors, it also extends to more jobs being created, and consequently, also to improving the construction industry.”
Moreover, the latest statistics revealed by Trade Economics, show that the Foreign Direct Investment (FDI) – which is an investment in the form of ownership by entities from a foreign country – currently stands at RO1.12bn.
“All of this should in turn make life for the 4.6million residents of the country a lot easier as more companies are formed and more job opportunities are created. Of course, this is still with a focus on Omanisation.”
Shahswar’s right. It’s not just the construction sector that will see a boom this year. As it turns out, the Sultanate is going all out with a slew of new developments and projects opening to the public or commencing to take shape for future use.
Here are some of them:
1) Madinat Sandan
Imagine an environment that’s a beacon for business and a home for the staff. That’s what the ‘Sandan Industrial Park’ aims to become once it opens its doors to companies. Spanning over 250,000 square metres, the industrial zone can house nearly 2,400 outlets – including 400 offices and 1,250 residential units. The area will also have its own ‘Auto World’ and ‘Construction World’. Sandan Development LLC’s goal here is to become the nation’s largest shopping mall for construction and automotive equipment. The industrial park will open in the first half of 2019.
2) Madinat al Irfan – City of the Future
Possibly the most ambitious project in Oman after the newly-opened Muscat International Airport; this billion-Riyal development houses everything from the Oman Convention and Exhibition Centre (OCEC) to five-star hotels and a smart, planned city. The latter will set the investors – Majid al Futtaim and Oman Tourism Development Company (OMRAN) – back RO5billion. The project is expected to start early this year but should take up to five years to complete. The housing project, which is nicknamed ‘City of the Future’, will span over 250,000 square metres and will include everything from service plots, commercial, residential, educational, healthcare, leisure and hospitality facilities.
3) Al Mahalab Towers and BBH Office Towers
The face of Al Ansab and Rusayl is expected to receive a thorough facelift following the opening of the Al Mahalab Towers and BBH Office Towers late in 2019. Offering apartments and office space, the projects will be worth roughly RO20million. An additional RO20m will be dedicated to the second phase of the Al Arfan City – an integrated residential city project.
1) Fibre optic services for all in the capital
With nearly 65 per cent of the whole of Muscat covered under fibre optics by Oman Broadband, there’s no reason to doubt that the services will be extended to newer areas such as Al Khoudh, Mabelah, Baushar, Al Ansab, Ruwi, and Qurum over the course of this year. The company also reveals that 2019 will be a crucial year for the brand, as they aim to cover 85 per cent of the entire country by the year 2020.
2) 5G in Oman
Before you get excited, we must let known that 5G is still in its initial phases in Oman. Moreover, with only a handful of devices supporting the band, there’s still a long way to go before 5G becomes a reality. Still, the Telecommunication Regulatory Authority (TRA) has issued a national level team to develop a 5G strategy and deploy the network in the Sultanate. The service is expected to begin rolling out late this year or by early 2020 – and should support speeds of up to 1.4gbps.
1) Oman-made Chinese car
Known for its endless possibilities thanks to its strategic location, Duqm is currently hailed as the hub for industries in Oman. Little wonder then that Wuhan Xiao Long Automotive Technologies Co. Ltd – a Chinese manufacturer – signed a deal with Oman Wanfang to begin laying the groundwork for an automotive manufacturing plant. The construction is expected to take place in various phases, with each having a capital expenditure of US$84million. The production capacity of the facility would stand at 10,000 units per annum – 9,000 for civil use and 1,000 for military use.
1) Jumeirah Muscat Bay Oman
UAE’s finest will be entering Oman soon. The Muscat Bay, which is expected to open early this year, is situated at Saraya Bandar Jissah. Overlooking the pristine waters of the Arabian Sea, the hotel will comprise a decked-out resort, boutique hotel and freehold properties (villas and duplexes). Yes, these hotels will be for those with deep pockets but it’s arguably another step closer to Oman’s goal of expanding its tourism sector.
2) JW Marriott Hotel
This is another boutique hotel, except that it is in the heart of the Madinat al Irfan development next to the OCEC. When opened this year, the hotel will feature 305 rooms and over 1,200 square metres of flexible space connected to the OCEC’s event and exhibition rooms. This will also be the first JW Marriott hotel in the country, and it sits with the government’s plan to facilitate the opening of 55 new hotels over two years (2018 and 2019).
3) Swiss-Belinn Muscat
The Swiss-Belinn Muscat will be a three-star property that, when it opens this year, aims to provide value-for-money accommodation. It is close to the new Muscat International Airport and will be operated by Swiss-Belhotel International (SBI) and owned by local firm Al Salaam International Hotel LLC.
1) Mina Sultan Qaboos Waterfront
The Mina Sultan Qaboos Waterfront aims to blend traditional Omani heritage with modern technology, albeit with a focus on sustainability and the environment. Situated in Old Muscat, the new project will turn the existing Sultan Qaboos Port into a waterfront destination and a hub for tourism. The underlying Muttrah Souk will remain untouched but the surrounding areas will be packed by residential units, retail and offices, hotels, and entertainment attractions. The project began the first of its four US$390million phases in 2015 and is expected to be opened later this year or early 2020.
The home of Oman’s Special Economic Zone (SEZ), Duqm, will lay witness to the development of nearly 20 tourism projects starting this year. The applicants have all reportedly lined up to invest in projects in the SEZ, taking up a massive 2.8million square metres in the area. No more details have been revealed as yet.
1) Travel and tourism
The Ministry of Manpower is all set to increase the nationalisation quota for the travel and tourism sector, starting this month. The goal is to increase the number of Omanis working in the sector from 42.1 per cent in 2018 to 43.1 per cent in 2019, and finally to 44.1 per cent by 2020.
2) New points system for companies
Omanis may soon be subjected to a points-based system to streamline the Omanisation system. This means, an Omani would be enlisted with their skillset so that the company showing interest in them can be sure they can actually do the job. Moreover, Omanis with lower points will receive lower roles, while those with more points could be placed in more senior positions.
3) A new system to hire expats
Hiring expats in Oman may just have become harder with the Ministry of Manpower working hard to set its new app rolling. A piece of software that uses a light-based system will inform employers immediately whether they can hire an expat or not. So, a green light would mean that the employer can hire expats while a red light would mean he can’t.
1) Rusayl Industrial City
The skies above Rusayl should soon be rid of pollutants – or at least much cleaner than before – as the Public Establishment for Industrial Estates (Madayn) signs an agreement with Oman Investment and Development Holding Company (Mubadrah) to transform the Rusayl Industrial City into a smarter development. As a part of this, the city will be fitting solar panels above its buildings to generate electricity that it will use for its own purposes and also send back to the grid to complement the nation’s energy production.
2) Dhofar Wind Farm
Thirteen turbines at a capacity of 50MW: the Dhofar Wind Farm project is definitely worth talking about. Funded in entirety by the Abu Dhabi Fund for Development (ADFD) and set up by Masdar – the Abu Dhabi Future Energy Company – the wind farm will be completed by March, this year, and furthermore, operational in the months to follow.
3) Rooftop solar panels
After nearly three years of silence after an emphatic announcement to the media, the rooftop solar project is back on… and this time for good. A tender for the installation of the panels – which will comprise a batch of 3,000 initially for the residential buildings in the Sultanate – will be floated in the first half of 2019. Monitored by the Authority for Electricity Regulation Oman (AER), the project is dubbed ‘Sahim’ and is intended to promote the use of clean energy resources.