Oman has undoubtedly experienced a few tough years in the construction and infrastructure sector. As cited in the Deloitte GCC Powers of Construction 2018 report, the 50% fall in oil prices since 2014 resulted in a decline in spending on new projects. Today, the market stands at about a third smaller ‘in terms of new contract activity than it was at its peak between 2013 and 2015.’
However, 2019 started on a positive note for the construction sector in Oman. In the budget statement issued by the Ministry of Finance, it was stated that the government had allocated RO 3.7 billion for infrastructure development and industrial projects. There was also a greater emphasis on creating an investment environment that would enable the private sector – whether through PPPs or fully private projects – to play a larger role in projects.
MarketResearch.com has forecasted an annual average growth of 3% between 2019-2028 thanks to the government’s economic diversification plan and keen interest from investors (notably from Chinese players). BMI reported that the sector would exhibit ‘robust growth’ mainly due to: favourable regulations; incentivisation of foreign investment; and a robust and ambitious economic diversification agenda:
Here are three upcoming mega projects from Oman that reflect the resilience of the sector:
1. Khazaen Economic City
Khazaen Economic City (KEC), is said to be the largest public private partnership (PPP) project in Oman so far. The proposed 52 million square metre integrated economic city in Barkha is the first and only integrated economic city within 60km of Oman’s capital, and the second integrated economic city in Oman after the Special Economic Zone in Duqm.
Atkins, the master developer, will deliver the masterplan (to be unveiled soon), design, and supervision work. The contract value is RO 2.6 million and Atkins will deliver complete consultancy services for the integrated urban planning of the city, detailed master plan, environmental assessment, sustainability assessment, engineering designs for infrastructures and utilities, preparation and evaluation of construction tenders for various infrastructure work of the city.
KEC also recently signed its first investment agreements with international investors to set up two manufacturing plants in the new economic city, a local daily reported. The construction contracts for the first phase will be awarded in the near future and works will commence in the second half of 2019.
2. Mina Al Sultan Qaboos Waterfront
The master development plan for the Mina Al Sultan Qaboos Waterfront was conceptualised in 2015. The US $2 billion integrated waterfront project is being developed in four phases and includes hotels, residences, food and beverage, retail and entertainment offerings.
DAMAC International and Omran are working on the project via a joint venture.
In Q4 2018, DAMAC announced the start of the groundwork at Mina Sultan Qaboos. The on-site discovery centre which is currently being outfitted will open its doors to the public in Q3 2019.
3. Quriyat ITC Project
The first integrated tourism complex (ITC) project to be developed in the east of Muscat, the Quriyat ITC project is the brainchild of Al Madina Real Estate company. According to the CEO of Al Madina Real Estate, Eng Abdul Rahman Barham, the total investments envisaged for the project is around US$1billion.
The project comprises a golf course, a number of freehold residential units, a water park, and three star-category hotels, and will be developed in multiple stages spanning over a period of 15 years.