SAMUEL KUTTY –
Jan 2: Oman’s 2017 Budget underlines the need of the private sector role in driving economic growth in the country.
In this regard, the process to enacting the much acclaimed public-private partnership law is being expedited.
“Such law will facilitate the partnership between public and private sectors, as well as activate relevant private sector initiatives”, said the budget statement issued by the ministry of finance.
Engaging private sector in implementing and managing government projects, facilities and activities has been given significant importance in the Ninth Plan as well.
“This will ease the burden on the budget and maintain good levels of investment that help to spur economic growth”, said the statement. The government’s privatisation programme envisages expanding the role of the private sector in acquiring, financing and managing government projects.
Experts are of the opinion that privatising government assets, especially those entail higher operating expenses or maintenance costs, will help the government in its diversification plans.
“The country now has a basic physical infrastructure in place, and in order to increase the socio-economic development of Oman, it is essential to build up a strong, efficient and competitive private sector”, said Saleh al Kiyumi, managing partner of a construction company. A law defining the private sector initiatives and projects is a welcome move, he said.
The budget has taken into account the importance of maintaining the levels of spending on development projects, which is estimated at RO 1.2 billion, representing estimated amount to be paid during the year as per the actual work progress of the projects.
There is also a decision not to cut spending on development projects.
According to the budget statement, the purpose is to ensure the completion of all ongoing projects without delay and make timely payment.
“This will help the construction sector which is facing huge payment problems”, said Shahswar al Balushi, Chief Executive Officer of Oman Society of Contractors.
At the same time, he said that amending the fees of licenses of bringing foreign workers may affect small and medium enterprises.
According to Al Balushi, the planned formation of a holding company in every sector will help improve and streamline the performance of investments.
The budget also accords importance to the implementation of several planned projects such as water supply, sewerage network and roads.
To finance these projects, the government seeks to borrowing from international and domestic institutions.
In this regard, Davis Kallukaran, a financial expert and founding and managing partner of Horwath Mak Ghazali said that the borrowing factor might be factored into the revenue sector.
It is also decided on the formation of a unit entrusted with the public debt management at the ministry of finance.
This will plan, organise and manage government debt, in addition to reviewing all means and options related to public debt in light of developments in global markets and financial position.