The Public Establishment for Industrial Estates (PEIE) announced the launch of Oman Investment and Development Holding Company (OIDHC) as part of its move towards privatisation. The new entity, wholly-owned by PEIE, will take over the process of constructing, managing and operating existing industrial estates in partnership with specialised operators in the field. The launch of the company was announced at a press conference here on Tuesday. According to Hilal bin Hamad al Hasani, Chief Executive Officer of PEIE, the company is expected to begin operations in the second half of 2018. “A time-plan has been prepared to transfer the existing industrial estates to the holding company gradually,” said Al Hasani.
The company, with a capital of RO 20 million, has been registered with the Ministry of Commerce and Industry. It will manage the assets of PEIE and implement its strategic plans. Mustafa Maqbool Ali al Lawati, CEO of OIDHC, said: “We will attract investors and analyse all the investment opportunities.” It will undertake the transfer of industrial estates from the government to the private sector. It will establish new companies under the holding company, which will invest with the private sector in the industrial estates. As per the Holding Companies regulations, OIDHC will own 51 per cent and the rest for the private sector. Speaking to the Observer, Al Lawati said: “We are trying to move more towards privatisation, giving more autonomy and providing investment incentives as well as opportunities by easing the procedures (within 10 days) as well as offer concessions up to 99 years.”
The company, he said, is looking for developers who can be given 99 years for developing and managing on their own under PEIE’s regulations. Incentives such as customs duty exemptions, tax-free manufacturing for five years, and land, utilities and infrastructure at a competitive price would be provided. “We are also introducing solar energy.” Out of a foreign investment of 48 per cent, 21 per cent of investors are from India and a little over 15 per cent from the GCC. Investments are linked to a ‘practice licence’, which is renewed every year. It shall be granted and renewed only to investors who meet the requirements. Among the requirements is compliance with the Omanisation criteria in the hiring process. The new regulations clearly define the rights of investors. They also indicate the obligations of PEIE towards investors. Regulations include time limits for granting approvals and licences.
“Twenty-one per cent of Indian investors are here because of the opportunities available here. There are raw materials such as limestone and marble, which is required by the Indian market. The other attraction is the proximity to other markets,” he said. Al Lawati said: “We have a Free Trade Agreement with the US and the investors can use our logistics area to export from Oman to other markets such as Africa and so on.” Exports from Oman are worth $5 billion, according to 2016 statistics. Figures for 2017 are yet to be announced. The demand for food products from Oman is picking up in the GCC countries, he said. Most of the work with PEIE can be conducted online. “Last year, we signed 315 contracts within PEIE, a 130-per cent growth since 2016,” said the CEO.
There is more than $16 billion in investment within PEIE and more than 55,000 jobs, of which 19,000 are Omanis. Preliminary figures for 2017 show the volume of investments in various industrial estates has touched RO 6.32 billion — a 5.5-per cent growth. The volume of investments increased by RO 329 million, taking the total volume of investments to RO 6.32 billion, compared with RO 6 billion by the end of 2016. “We are proposing to create an international village where people from Oman can execute their projects even when they have not yet decided whether to invest in their projects or not or while looking for other opportunities. This is part of our future strategy,” said Al Hasani. PEIE will be opening up investment opportunities in the new industrial estates located in a number of wilayats in 2018 and 2019 for locals as well as foreign investors in the private sector.
It will also attract local and international industrial developers to invest in the construction, management and operation of specialised investment areas. PEIE has established rules, procedures and legislative frameworks that grant developers incentives and clearly define their rights and duties, which include granting of usufruct contracts for up to 99 years. PEIE aims at benefiting from international and regional expertise in the fields of construction, management and operation of economic areas. “This will pave the way for attracting international operators for the estates and public facilities in addition to inking contracts with them through agreements that last for 25 years,” he stated. This is expected to increase the competitiveness of industrial estates in Oman and create an integration of activities within the industrial community through the best management practices.