$177 bn projects planned or under way in Oman

With about $177bn of projects planned or under way, Oman has a substantial pipeline of projects as Muscat seeks to diversify Oman’s economy into logistics, tourism and manufacturing, while improving public services and infrastructure, according to MEED’s newly published Oman Projects 2018 report.
Oman’s economy remains heavily reliant on hydrocarbon revenues, although their contribution to GDP has been shrinking.
Oil and gas activity accounted for 45 per cent of the sultanate’s GDP in 2014. But the hydrocarbons contribution fell to about 34 per cent of GDP in 2015, and to about 27 per cent in 2016, due to the fall in oil prices.
Muscat is targeting downstream industrialisation, investment in transportation and logistics, and tourism as the principle means of diversifying the Omani economy. These in turn, are the main drivers of project activity. In 2017, Muscat’s diversification drive was boosted by the award of contracts worth $5.7bn on the giant Duqm refinery project, the report said.
These underpinned a 31 per cent year-on-year jump in the value of projects awarded in Oman, and saw the country emerge as the region’s third biggest and fastest-growing projects market in 2017. The development of a regional manufacturing and logistics hub in Duqm will continue to drive project activity in Oman in 2018.
“But despite a strong 2017, Oman faces many challenges. Muscat faces the tricky task of balancing the requirement to diversify with the need to ensure its budget deficit does not get out of hand,” the MEED report noted.
The total value of projects planned in Oman, but yet-to-be awarded at the start of 2018, was about $126bn. This suggests that spending levels could remain relatively high in the coming years, although not all projects are likely to succeed or be awarded on schedule.
Oman’s projects market is dominated by government ministries or other state-linked bodies. Among the most active is the Transport and Communications Ministry, which is responsible for the sultanate’s roads and airports expansion programmes. However, the government is keen for the private sector to play a greater role in project development over the coming decade.