With infrastructure spending by the government having all but dried up, the Sultanate’s cash-strapped by hugely important construction section is exploring large-scale real estate development opportunities aimed at averting what has been characterised as a looming “crisis” in the industry.
The initiative is being spearheaded by the Oman Society of Contractors (OSC), the umbrella grouping of construction contractors and service providers in the Sultanate, a top official of the non-governmental organisation said. Shahswar al Balushi, Chief Executive Officer, said the Society is presently looking at “two major projects” that he hopes will open up business opportunities for Oman-based contractors currently starved of any work in the wake of the fiscal downturn that has all but squeezed government investment in infrastructure projects.
“In the construction sector, we have started to take the bull by the horns,” Al Balushi said. “As there are no projects from the governments, the idea is for us to do some business ourselves and take some projects forward. We are right now talking to the government to give the construction sector the ability to do large projects. The sector will go out and look for funding. The current initiative concerns two major projects, details about which cannot be discussed due to confidentiality reasons.”
The revelation came during a panel discussion on Public Private Partnerships organised as part of the OER Business Summit 2017 held at the Sheraton Oman Hotel on Monday. The discussion, moderated by well-known ex-BBC business news presenter Nima Abu Wardeh, also included the following panelists: Pankaj Khimji, Director — Khimji Ramdas; Qais al Zakwani, Executive Director — Authority for Electricity Regulation Oman; Hatem al Shanfari, noted economist and Chairman — GCBM; and Srinivas Rao Edupall, Project Finance & Syndication — Bank Sohar.
The Oman Society of Contractors (OSC), Al Balushi said, is keen to help inject new business opportunities in the construction sector by initiating projects itself. “We are telling the government that the construction sector is ready to do projects, but there are certain conditions involved. At the end of the day, these projects will have to be sold to local, regional and international markets. And in order to attract international buyers, they have to be given some incentives, to make the projects more competitive, for example, price-wise, logistics-wise, and so on.”
With many contractors having accrued large outstandings against completed infrastructure projects, the cash-hit sector has no alternative but to explore new opportunities in order to stay afloat, said Al Balushi, stressing the importance of this industry to the national economy.
The construction sector is one of the largest employers with a significant multiplier effect on the wider economy, he said. Any country needs a strong construction sector to keep the economy ticking alone. After all, large infrastructure projects such as roads, airports, seaports and so on, can be undertaken only by a dynamic construction sector, Al Balushi noted. OER Business Summit 2017 was organised by UMS Events.