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Property Transactions in Jan-Aug Period Surge on Rising Ownership, Easy Mortgage

Posted by AGORACOM-JC at 3:56 PM on Friday, October 2nd, 2015

PROPERTY TRANSACTIONS IN JAN-AUG PERIOD SURGE ON RISING OWNERSHIP, EASY MORTGAGE

  • Rising trend of property ownership and easy access to mortgage, the sultanate’s real-estate market is witnessing a robust growth this year despite persistent lower oil prices.
  • Total value of property transactions surged 53.2 per cent to RO2.94bn during the period from January–August this year from RO1.91bn in the corresponding period of 2014

By Gulam Ali Khan

September 30, 2015

MUSCAT –

With the rising trend of property ownership and easy access to mortgage, the sultanate’s real-estate market is witnessing a robust growth this year despite persistent lower oil prices.

The total value of property transactions surged 53.2 per cent to RO2.94bn during the period from January–August this year from RO1.91bn in the corresponding period of 2014.

The sharp rise in transactions comes on the back of robust growth in mortgage contracts. Traded value of mortgage contracts jumped 79.6 per cent to RO2.05bn from RO1.14bn a year ago, statistics released by National Centre for Statistics and Information (NCSI) showed.

“The growth is more due to a combination of factors including population growth leading to demand-based activity, desire of property ownership in more uncertain economic times and better availability and competitively priced mortgage options,” said Christopher Steel, managing partner at Savills Oman.

“We believe that property ownership is increasing in appeal as there have been a lack of other real investment opportunities for the Oman population at large. There have been no significant rights issues over the period and the stock market is showing signs of sensitivity, therefore property becomes a viable route for investment,” he said.

The number of mortgage contracts rose by 13.2 per cent to 15,001 in the first eight months this year from 13,249 a year earlier.
Steel said mortgages are now more accessible for the population at large with banks and finance houses having tailored their products to meet the requirements of end-borrowers.

“Islamic financing options have certainly appealed to a large segment of the market that previously was not comfortable with traditional mortgage solutions. Also, the financial logic of mortgaging property is now better understood by certain classes of investors.

With most mortgages costing below five per cent per annum and rental returns from most property higher than this, property become basically self financing when geared at circa 70-80 per cent.”

In addition to mortgage transactions, NCSI statistics shows that the traded value of property in sales contracts rose 13.3 per cent to RO867mn from 765mn. The number of sales contracts decreased by 2.3 per cent to 54,220 in first eight months of 2015 compared to 55,521 last year.

Unlike the UAE – where property transaction levels have been falling across Abu Dhabi, Dubai and Sharjah – lower oil prices have not been negatively impacting Oman’s property market.

“There has been no discernable negative affect on the property market as a result of lower oil prices. Certainly, a slowdown in some larger infrastructure projects as a result of reduced government expenditure could negatively impact on some areas of secondary real estate but we believe this will be balanced by the push for diversification into other areas of the economy,” Steel said.

The number of properties issued for GCC states citizens dropped by 25 per cent to 1,670 from 2,233 in first eight months of 2014.

Read more:http://www.muscatdaily.com/Archive/Business/Property-transactions-in-Jan-Aug-period-surge-on-rising-ownership-easy-mortgage-4bye#ixzz3nLZniGS8
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Oman Is Like a Flawless Topaz Hidden Under the Gaudy Jewel Box of the Emirates

Posted by AGORACOM-JC at 12:02 PM on Wednesday, September 2nd, 2015

The thinking person’s Dubai

Wadi Bani Khalid, 203 km from Muscat. Photo: 123Rf
 

Clad in the blazing oranges and yellows and turquoises of the desert, Bedouin women are shouting numbers at little boys leading camels around an enclosure. Grey-bearded men in long white robes and turbans are circling around the narrow streets of the small, dusty town, where camels are hitched to posts like horses in a cowboy movie. The women are wearing hawk-faced black masks over their faces—whitened, to protect them from the sun, and made vivid with eyeliner and mascara—so they might be countesses just emerging from a Venetian costume ball. This Thursday-morning camel auction has been taking place in the Omani town of Sinaw for centuries, but only recently can newly bought humped creatures be seen in the backs of Toyota pick-up trucks, being driven away together with watermelons, sacks of dates and clumps of grass.

Three hours later, I am being driven across great dunes of sand, stretching out as far as I can see in every direction. My guide Hilal zigzags across the emptiness till, gears grinding over whorled hilltops of sand, we see a small cluster of domed white tents far below. Pulling up at the Desert Nights Camp in Wahiba Sands, we’re met with glasses of chilled mango juice. Then I’m led across to my tent, the silence stretching all around. I find myself in a three-room suite with a mini-bar, air-conditioning and a highly welcome rainforest shower.

Unlike Arab Emirates

I suppose I’d been visiting Oman long enough not to be shocked by the rare mix of exoticism and extravagant comfort; for years now, the sultanate tucked between Saudi Arabia, Yemen and the United Arab Emirates, has been at once remote and luxurious, full of adventure and strikingly safe. For many, it’s the thinking person’s Dubai—low-key and elegant, where its neighbour looks like the bastard child of Beverly Hills and Las Vegas. If you want malls, go to the city of Lamborghinis in the sand; if you want walls—a reserved, mysterious and protected place that invites you into centuries of sophistication—head to Oman. With a population a fifth of Mumbai’s scattered across a country larger than Britain, it’s like the flawless topaz hidden under the gaudy jewel box of the emirates.

As soon as Sultan Qaboos bin Said, now 70, came to power in 1970, he decided to proceed with the care and caution demonstrated even today by local drivers on their largely empty roads. Learning from the mistakes of other oil-rich states and determined not to lose the old and the distinct, even as he brought much-needed modernity to his land, he slowly fashioned a tasteful, bespoke, understated version of Arabia that did not aim to erase tradition so much as to heighten and clarify it with the help of the new.

As late as the 1960s, there were exactly three schools, two hospitals and nine kilometres of sealed roads in all of Oman; the sultan of the time, the current ruler’s father, had retreated to his palace in the southern city of Salalah, banned sunglasses and radios, and even locked the doors of Old Muscat at night in an effort to preserve his nation. Now, Muscat has opened up—and all its buildings are white, or painted pastel colours, constructed in traditional style and less than nine storeys high. The result is a city that looks like a bone-white vision of a fairy-tale Arabia, even as it now has an opera house, a new airport under construction and fresh hotels coming up.

“Ladies here in Oman work—and drive,” Hilal told me as we passed the palaces of Old Muscat. “Not like Saudi Arabia.” Sultan Qaboos realised that oil would be gone soon, so he encouraged his people to engage with the modern world, and fashion lives that would not run out when the oil did. “Here in Oman, the taxi drivers are Omani,” Hilal continued, with unfeigned pride. “The construction workers are Omani. Seventy-five percent of the population is Omani. Only we have tailors, foreigners. Laundry. Hairdressing…” The contrast with the other emirates did not need to be spelled out.

I’d visited Oman before and savoured the misty, even mystical monsoon season, the khareef, in the south, which turns the Dhofar region into a cool, green sanctuary for Arabs from across the peninsula. Less than three hours by daily flight from Mumbai, with beaches more unspoiled than Thailand’s, forts as glamorous as Rajasthan’s, and deserts and mountains as spectacular as anything you’d see in Australia or the American West, Oman struck me as a treasure waiting to be discovered.

Now, returning 10 years on, I thought I’d spend a week travelling around the north to see what kind of pleasures might await a visitor today. The rare place of deep foreignness, where no shopkeeper hassles you and taxi drivers patiently count out their notes in your palm to make sure they’re not short-changing you, Oman continues somehow to open its doors to everyone without ever quite losing its soul. The only challenge is to see it before the rest of the world gets in on the secret.

A Shangri-La in the sands

Shangri-La’s Barr Al Jissah Resort and Spa

Al-Waha hotel at Shangri-La’s Barr Al Jissah Resort and Spa.

I based myself on this trip at the Shangri-La’s Barr Al Jissah Resort and Spa, tucked behind dramatic limestone cliffs and around a private beach a few miles outside of Muscat. Taking over a largely forgotten bay at Bandar Jissah, the Shangri-La came up with the idea of opening three separate properties, linked at the core: al-Waha, aimed at families (complete with its own souq, amphitheatre and archaeological site); al-Husn, a sumptuous ‘six-star’, adults-only castle; and, in the middle, the more businesslike al-Bandar. All three have 17 restaurants scattered across them. But those staying in al-Husn, as I did, can enjoy a stately afternoon tea in a palatial courtyard while families with kids can romp around a river and an Omani Heritage Village not far away.

Within 10 hours of arriving in the country, I was out on the water, watching schools of dolphins flourishing through the air, five of them knifing through the waves like synchronised swimmers and 30 in all, on every side of our little vessel, cresting over the blue-green bay. Oman has long been home to some of the world’s most accomplished sailors; Sindbad was said to have come from here, and between the 18th and 19th centuries, its navies had brought parts of Pakistan, Zanzibar and Kenya under Omani control. As a sweet-smiling teenager from Oman’s shipbuilding capital of Sur piloted us through the water, the stony, sand-coloured landscape of the interior was broken up by green waters and headlands, red and golden in the sun.

The old town of Muscat, 15 minutes away by car, is most notable for its calm: if you walk through the small souq in the Muttrah area, you will hear none of the clamour of Istanbul or Old Delhi. And when you are finished at the Bait Al Zubair museum, you can look at the nearby sultans’ palaces and government offices—as stately and pristine as when they were built. One of the grand pleasures of Muscat is walking along the corniche in the dusk—spotlit castles above you and hilltop restaurants such as the Mumtaz Mahal waiting to impress.

Driving through

Grand Mosque, Oman.

The Grand Mosque. Photo: 123Rf
 
The next morning, Hilal and I drove a little out of town to visit the Grand Mosque, completed in 2001, and one of the largest Muslim houses of prayer in the world. A group of pilgrims from Thailand had arrived just as we did, and we walked together in silence under eight-tonne chandeliers from Austria, over the 21-tonne carpet handwoven by 600 women in Isfahan, between its Indian sandstone walls and Carrara marble surfaces and the great ceilings made of Burma teak. It seemed at once lavish and deeply quiet, up-to-the-minute and full of practised devotion: Oman, you could say, in miniature.

Then, very quickly, we were off, into the depths of the country. We were bouncing for 90 minutes up a scrabbly, sandy path through the high mountains. On one side was a sheer drop, of a thousand feet or more; all around the Al Hajar range was a landscape of black mountains and buttes worthy of Arizona. At the end of the road loomed the country’s highest peak, the 9,000ft Jabal Shams, and Wadi Ghul, a stunning array of 3,000ft vertical cliffs and depths that Omanis call their Grand Canyon. I checked into a little stone house at the British-run Jebel Shams Resort and heard nothing but silence for the next many hours. That sense of quiet is one of the singular blessings of Oman still, and even as the Arab world was experiencing convulsions this spring, Oman was barely disturbed.

Set, like most of Oman’s 500 forts, above an oasis, the Jabrin Castle, a 17th-century centre of learning, is a complex of courtyards, hidden rooms, twisting staircases, a constantly evolving study in light and shade. In one corner was a breeze-softened library—in another, the castle’s jails and holes, through which hot date oil might be poured upon invaders. Jabrin was a reminder of Oman’s exquisite beauty and fierce sense of protectiveness, as it, at once, cultivates its inner treasures and remains on guard against invasion. I listened to the excited cries of a group of schoolgirls—all dressed in black abayas and white head-scarves—and watched a girl in an emerald gown tending to the date palms through the palace windows.

An hour or so later, we were in Nizwa Fort, home to a celebrated cattle auction every Friday morning (cows are brought 965km from Salalah in the south and sold for US$500 or Rs32,000s apiece). Not very far away was the Wadi Bani Khalid, where locals delightedly picnicked under pavilions and frolicked in deep green water pools. Whether passing the stunning new palaces that are schools and hospitals set up in remote areas or overtaking blue water trucks ferrying to villagers still living in spiky mountains, we saw how Oman seems to be concerned still with sustaining its own life and not turning itself into something else—a modern Macau.

The climax of my tour came as Hilal and I drove six hours north of Muscat, passing through the United Arab Emirates en route and then—in the middle of a lunar landscape, all grey limestone valleys and emptiness—saw a small, almost invisible brown sign by the side of the road. We passed through a security post and then took a 5km, 15-minute drive along a narrow, unpaved path, up and over a mountain. At the top, suddenly, we saw a blue-green bay below with a traditional village on one side, and on the other, a set of structures that honoured the village’s architecture in a more lavish form.

When we arrived at the gorgeous Six Senses Zighy Bay resort, I was shown to my private villa, which (like all the 79 others here) came with its own plunge pool, own traditional Omani summer hut, its own outdoor and indoor showers, its own bathtub (this, in a country where water is famously scarce and in a resort where a swimming pool and a mile-long stretch of empty beach were less than a minute’s walk away). The Six Senses even has its own time-zone—one hour ahead of Oman time—so that you can watch the sun rise and set at an hour convenient for your sleeping.

The next day, a villager called Humeid took me out on the water to explore the secret bays and coves all around and then led me on a drive through the mega-stalagmites that are like mountains here, teaching me to read the landscape. (“This was a wild fox-trap,” he pointed out to a scatter of stones. “That was where black Omani honey was made,” he motioned.) We looked out on a vast landscape of rocks. “How many villages are here?” he asked. I could see none. “Seven,” he said and pointed out one stone house camouflaged on a cliff and another designed to fade into the background.

We drove up to a lonely hut on top of a peak and went in for some coffee and halwa with an old man who lived alone here. “He never married?” I asked. “No,” said Humeid. “He likes just to live with his goats. With the silence. Watching the mountains, thinking about God.” The man, toothless, smiled at me and begged me to eat more. Alone, at the top of the mountain, surveying a huge landscape of emptiness and silence, I had arrived at Oman’s Oman, the still point at the centre of one of the most untouched and stirring places I have seen.

Source: http://www.cntraveller.in/story/thinking-person-s-dubai

Tourism contribution to GDP rises

Posted by AGORACOM-JC at 5:14 PM on Thursday, August 27th, 2015

Tourism contribution to GDP rises

  • Direct and indirect contribution of the Sultanate’s tourism sector to Gross Domestic Product (GDP) is estimated to exceed six per cent this year, according to a high ranking official of the Ministry of Tourism
  • Maitha Bint Saif al Mahrouqiya, Undersecretary, Ministry of Tourism, said tourism accounts for nearly 2.5 per cent of GDP and contributes RO 650 million annually to economic activity as against RO 273 million in 2005, thus achieving an average growth rate of around 11 per cent per year (2005-2014).

By Hasan Kamoonpuri — MUSCAT: August 26: The direct and indirect contribution of the Sultanate’s tourism sector to Gross Domestic Product (GDP) is estimated to exceed six per cent this year, according to a high ranking official of the Ministry of Tourism. In comments to Oman Observer recently Maitha Bint Saif al Mahrouqiya, Undersecretary, Ministry of Tourism, said tourism accounts for nearly 2.5 per cent of GDP and contributes RO 650 million annually to economic activity as against RO 273 million in 2005, thus achieving an average growth rate of around 11 per cent per year (2005-2014).

“Oman’s tourism industry has seen considerable development and progress in recent times, which is reflected in the increase in all tourism indicators,” she added.

“Specifically, one of the milestones is related to the implementation of the Integrated Tourism Complexes, namely, The Wave, Salalah Beach Resort and Jabel Al Sifa Resort. These ITCs are in part operational with world class hotels, golf courses, marinas and residential units.

“Another milestone is the establishment of a completely new department which caters for the provision of miscellaneous services and a comprehensive set of information for investors, both domestic and foreign.

The market-based representative offices opened in most tourist markets is yet another milestone in tourism development”.

The launching of the Oman Tourism Strategy project in mid-2014 is a landmark that provides a roadmap to guide “our efforts on sound scientific and progressive basis”, thus reaping the benefits and many opportunities that are now made available through international tourism.

The preparation of the long-term tourism strategy (2016–2040) has entered a very advanced stage and it is scheduled to be unveiled in September this year.

The Sultanate’s tourism sector launched itself into 2015 on a high, fuelled by strong bookings by hotels and resorts and a strong line-up of projects that are currently underway.

The revenues of hotels during 2014 stood at RO 216,526, 000 compared to RO198, 835, 000 in 2013, thus indicating that hotels’ revenues grew by RO 17.7m in 2014, according to the National Centre for Statistics and Information (NCSI).

The Sultanate’s tourism revenue from international visitors exceeded $1 billion for the first time in 2012, making it one of the top tourism destinations in the Gulf region, according to a report published by the United Nations World Tourism Organisation (UNWTO).

The tourism undersecretary said there are a number of mega projects that are currently underway such as the Convention Centre, Omagine, Palm Mall and Ras Al Hadd Resort. Omagine and Palm Mall are located in Muscat Governorate (Wilayat As’ Seeb) while Ras Al Hadd Resort is located in South Sharqiyah Governorate.

Source: http://omanobserver.om/tourism-contribution-to-gdp-rises/

Oman Economic Review – Opportunities/challenges in Oman’s construction; Tourism growth prospects

Posted by AGORACOM-JC at 10:08 AM on Tuesday, August 18th, 2015

 

 

 

Oman Economic Review – Opportunities/challenges in Oman’s construction; Tourism growth prospects


  • Despite the fact that crude prices are not showing any signs of recovery even after the first half of 2015, the construction sector in the Sultanate is still on a sound footing
  • Key infrastructure projects are not witnessing any major cuts or delays, thanks to the government’s resolve to keep on funding them

Photo Credit:Reuters/Carlos Jasso
On the face of it, Oman’s construction industry has been adept at negotiating a weak oil price. But it is going through a steep learning curve where there is no dearth of new challenges such as payment delays and shortage of workers. A. Harikumar examines if the sector is getting equipped to convert such imponderables into new opportunities for growth in the long run

When oil prices fell from around $110 per barrel in June, 2014 to almost half by the end of the year, a few sections of Oman’s construction industry had raised apprehensions about its impact on the country’s economy, leading to delays and cuts in major infrastructure projects in the future, if the prices failed to rebound.

But despite the fact that crude prices are not showing any signs of recovery even after the first half of 2015, the construction sector in the Sultanate is still on a sound footing. Key infrastructure projects are not witnessing any major cuts or delays, thanks to the government’s resolve to keep on funding them. There has not been any major lay-off of workers in the sector; and interestingly enough, new opportunities are also arising mainly in the tourism sector which is developing fast in Oman. The continued capacity building in this vital sector has brought about more opportunities for contracting companies, balancing losses, if any, from other sectors. Many new tourism projects are coming up in government and private sectors, as the government is encouraging development of tourism sector to diversify the economy.

However, this does not mean that the sector is fully equipped to handle crises and exploit emerging opportunities. Although the sector which employs over 700,000 people (accounting for more than 18 percent of Oman’s population) has been able to fend off the ill effects of falling oil prices to a great extent, the pace of growth could not be maintained in the near future because of some other reasons, which some major contracting firm attribute to the inherent weakness in the system.

For instance, Galfar Contracting, the biggest Omani contracting company, recently faced one such challenge; i.e. variations in project and differences of opinion between the client and the contractor on the charges for it. There are also complaints about inordinate delays in getting actual orders to start work, even after companies win bids. Most importantly, contracting companies in Oman find it very difficult to get the required workforce and find that Omanisation targets are unachievable.

It will be ominous for Oman’s economy, if its construction industry which had recorded an average growth rate of 5.5 per cent in the past five years and contributed to the national economy RO1.654bn -around five per cent of the GDP by 2013-gets bogged down because of such issues.

On the positive side, the government of Oman is giving much importance to the development of construction sector, as evident from the fact that the Sultanate’s latest five-year plan has earmarked an annual allocation of RO2.5bn for the sector, of which 50 per cent goes for infrastructure development. Independent agencies like MEED, which track projects in the region, put the value of new contracts that are being placed in Oman in 2015 at $15bn which will ensure continuity of growth.

However, there are many issues when it comes to the implementation stage. Many in the industry feel that if the authorities fail to remove hurdles in the execution stages, the industry will not be able to realise the full potential of the government’s initiatives.

While reviewing the situation in the construction sector in Oman and suggesting solutions, industry leaders feel that if oil prices fail to rebound by the end of this year, it will adversely affect the budgets for major projects. Many have started preparing for such an eventuality.

Impact of falling oil prices

Commenting on the present state of affairs, Oman Society of Contractors (OSC) CEO, Shahswar Al Balushi says, “The impact of oil price fall on the construction sector in Oman has been minimal till now. There has not been any drastic change in major ongoing projects, including those in the infrastructure and the tourism sectors; and there is steady progress at present. This is as a result of the prudent fiscal management of the government which has ensured growth. Crucial projects like Duqum SEZ, Oman National Railway Project, development of major airports in Oman etc which are vital for the diversification of the economy are on schedule. To sum up, at present, there is no concern about ongoing projects and no major projects have been cancelled.”

He adds, “Oman government has the experience in handling such situations. We have an aggressive approach on development in certain areas; but not so aggressive that it could go out of control.” But it is unlikely that the present situation will continue to be so for the contracting industry even if oil prices remain flat in the next year.

Looking at the future prospects, Shahswar comments, “If oil prices continue at the current level in the next year, I foresee a prioritisation of projects. If the attempts at diversifying the economy to non-oil sectors like tourism, where lots of construction is required, hit the target, there will be a level of balance. But having said that, the major player in tourism in Oman is Omran, which is a government sector company, and so there is again the possibility for prioritisation in that area of business also. Hence, we need to encourage private investment in tourism. If the price drops below the present level, then I would see more efforts from the government to stabilise the economy and make it sustainable that could mean heavy cuts in expenditure and in projects. The logic of the government action will be to create a balance in the economy so as to continue the progress. There might also arise a need to borrow money to implement important projects. Therefore, it will be prudent for the government to facilitate private investment. This can be achieved through reducing redtapism and simplifying approvals and procedures,” he avers.

Opportunities and challenges

However, some of the major consultants feel that certain areas in the sector have already started feeling the impact of oil price fall.

Ayman Saidi, director of infrastructure division, KEO Oman says that although some segments have been affected, Oman’s emphasis on developing tourism is leading to the implementation of more tourism-related projects. “Our initiative to diversify clients is a response to the fall in oil prices. Oil price fall impacts annual budget of the government, which in turn impacts all ministries, municipalities etc. We have noticed that some projects have been put on hold and some have been delayed, slowed down or cancelled altogether”.

He adds, “I see the fall in oil prices as an opportunity rather than a threat for Oman. Unlike other countries in the region, Oman is not completely dependent on oil and its diverse topography extending from Salalah to Musandam offers great potential for the development of tourism projects. There is a shortage of high-quality hotels in the country, especially during the peak seasons. There are only a few hotels on the beachside; therefore, more hotel projects need to be developed in that area.” He adds that the number of projects in tourism sector in Oman including three, four and five star facilities has gone up in recent years.”

According to Lorenzo Nicolai, regional manager, Renardet, one of the top multi-disciplinary consultants in the infrastructure sector in Oman, the falling oil price is affecting the sector in the sense that it now takes a longer time for projects to be awarded. “However, new projects are being announced,” he adds. “It is not known if lack of funds or other factors are leading to the slowing down in awarding projects. Either way, this is definitely affecting us.”

BMI Research in its latest report released to the media has revised growth forecast for Oman’s construction industry in 2015 from 5.5 per cent to 4.5 per cent in the light of falling oil prices and its impact on Oman’s economy. According to them, the weaker crude prices will have a moderate impact on infrastructure investment in Oman. They also said they would further revise the forecast if crude oil price continue to remain low over a sustained period of time.

However, Alpen Capital, in its report on GCC construction industry released to the media recently, expects the construction sector in Oman to remain robust. It has noted significant activities in the infrastructure and tourism sectors and in private and public commercial building construction. The report feels that the rising population and fast growing middle class will drive construction activities in the housing sector. It also notes that the diversification plans of the government will help the growth of construction sector.

Growth prospects in tourism sector

On the impact of oil price fall on projects in the tourism sector, Eng Ali bin Nasser al Rasbi, acting CEO of Omran, a government sector company which owns major projects and is currently implementing an ambitious expansion plan says, “In terms of Omran‘s tourism developments and investments, no projects have been put on hold. Investing in hospitality and mixed-use developments today makes good business sense. Investments lay solid foundations for a stronger travel and tourism sector, and thus, an increasingly diversified and resilient economy in the coming years. Building capacity and capability of the sector is vital in order to accommodate a growing number of visitors arriving on our shores every year and ensuring that they will keep returning in the years to come”.

According to him, the contribution made by the travel and tourism sector to the national economy has been growing year-on-year, with a 23.8 per cent growth in visitor numbers over the last five years. This translates into increased inbound revenues for the economy, new job opportunities and greater levels of participation by the SMEs to support the sector. He adds, “At Omran, we are working hard to build capability and capacity within the sector in order to harness the Sultanate’s great potential as an international destination of choice. Investment in this sector is vital for a sustainable future for the nation.”

As a worldwide phenomenon, when oil prices drop, the currencies of non-oil producing countries appreciate as do disposable incomes, leading to an increase in international travel. If Oman can continue to position itself as an attractive destination for international travellers, it will be able to capitalise on the surge of global tourism during these times. This way, revenue changes caused by fluctuating oil prices can be somewhat offset by increased tourism activity. This highlights the vital role that travel and tourism plays in supporting a sustainable and diversified economy of the future.

Payment delays and variation in projects

Aside from oil price fall, there are some long-lasting challenges confronting the sector such as payment delays and shortage of workers. Shahswar Al Balushi has been more upfront about these issues, “Many contracting companies are not paid on time. However that is not an issue related to oil price. Funds for ongoing projects have already been allocated and current issues on the payment front are related to the clients’ willingness to pay on time and in accordance with the terms of the agreement. There are also issues related to clients’ requests for variations in the project and their readiness to account for the variations in the budget. I think one of the issues that government needs to look into is restricting the clients (in many cases government agencies) from making substantial amount of variations in projects which result in a heavy bill, not accounted for in the budgetary framework.”

“Payments of even very big contracting companies are delayed for months and even years. Arrears of some companies run to the tune of around 30 per cent of their turnover. These companies are finding it very tough to pay sub-contractors, vendors etc. Their cash flow has been blocked. Projects in Oman are allocated through different tender boards. But companies that win, get actual orders after months or years. In the meantime, they might have made advance payments for mobilisation and other things. If work starts only after months or even years, it will block resources of contracting companies. This needs to be resolved. We need to regulate and refine the sector and get rid of hidden trade. Then only will we be able to provide quality and implement efficient and cost-effective solutions within the country and abroad, making the industry highly competitive,” concludes Shahswar.

According to a section of contractors, time constraint is also one of the biggest challenges faced by contractors here. Quality could be compromised when clients make demands to complete projects in a time frame that is not feasible. Contractors have to be given a proper time frame for execution, especially in the case of mega projects.

Omanisation and talented workers

Contractors across the spectrum in Oman are unanimous in their opinion that there is a dearth of talent in Oman. “Availability of workers at different levels is still a major problem facing the construction sector in Oman which employs around 700, 000 people currently”, agrees Shahswar. The total number of Omanis working in the sector is 56,000, less than nine percent of the total work force. The Omanisation target set by the Ministry of Manpower for the sector is 30 per cent, which means 210,000 Omanis should have been employed in the sector. But we don’t have that many Omanis who are willing to work in the sector; nor those who are equipped with the skillsets relevant for the sector. Considering these facts, we reach a conclusion that the current Omanisation target is not realistic.”

“Our request is to fix a realistic Omanisation target that the construction sector can actually achieve,” says Shahswar. “We are talking with the government to bring the target down to 12 per cent in 2016. If possible, it can be increased to 15 per cent during the ninth five-year plan. Response from job seekers, higher education graduates and the industry need to be used as an index to determine whether to maintain or increase the Omanisation per cent in any particular year, instead of increasing the target for the sake of numbers. There should be a concerted effort among the industry, government and labour unions to develop the workforce required by the sector; and in fact, I believe the labour union should ensure the local work force are properly qualified and should take the responsibility of addressing the issue of non-performing local workforce. Of the total workforce employed by the sector, the majority are construction workers who occupy the lower strata of industry like plumbers, electricians, mechanics, brick layers, painters etc. They are highly skilled individuals.” He is of the opinion that we need to develop multi-skilled construction workers who are capable of undertaking multiple tasks at the site such as painting, plumbing, tiling, electrical work etc. This will help the industry to streamline the workforce and manage them better. This need to be applied to expatriates also which will help to reduce their number. He adds, “Employing multi-skilled workers categorised as construction workers permitted to perform multiple tasks at sites will end the legal issues arising from workers performing duties across sections- like a plumber lending a helping hand to complete paining works, which is not allowed at present. This is how construction industry performs all over the world.”

Shahswar further added that Omanisation targets should be rationalised and implemented across the board in the construction sector. “As per the statistics of Ministry of Commerce and Industry, 100,000 companies are registered as construction companies in Oman. Of this 6000 are Grade 1 and above, and they employ 53, 000 Omanis, while remaining 94,000 companies employ just 3, 000 Omanis. If Omanisation is 12 percent and is implemented by all without exception, 94,000 companies will have to employee at least one Omani which will create thousands of job opportunities for Omani youth,” he adds.

Looking ahead

Meanwhile, experts point out that construction sector in Oman needs to make use of the innovations that are happening in the industry across the world. At present, technologies and practices have not changed much here in the last couple of decades. Regulators need to approve modern technologies and practices so that contractors could make use of it. This will help to streamline work and improve the profitability of the industry.

The feeling across the construction and contracting sector in Oman is that the sector is capable for contributing to the growth of Oman’s economy in a better way, if the problems that trouble the industry are solved. In fast developing economies like India and China, the growth rate of construction sector is around 10 percent. Oman is also in a developing stage and the current growth rate of 5.5 percent can go up significantly. However, if proper corrective steps are not taken, the construction sector may find it difficult to sustain even the present growth rate.

The fundamental significance of the construction sector in developing economies like Oman lies in its role in employment creation, capital formation and its aggregate spillover effects. As economies develop, construction sector spillovers accrue to propel productivity in other sectors of the economy. If the sector grows more, it would provide more jobs to Omani youth directly and indirectly. That is what we need at this critical juncture.

Source: http://projects.zawya.com/Opportunities_and_challenges_in_Omans_construction/story/ZAWYA20150817055042/?utm_source=zawya&utm_medium=web&utm_term=term&utm_campaign=story/

Oman’s Construction Market To Remain Robust From 2015-18; Top Ongoing Projects In Oman

Posted by AGORACOM-JC at 11:05 AM on Thursday, August 13th, 2015

Omagine In The News

Posted by AGORACOM-JC at 1:08 PM on Tuesday, July 14th, 2015

Good day,

Below is a sample of the coverage generated as a result of OMAGINE Inc.’s news disseminated last week.

Regards,

AGORACOM

http://businessinsights.pk/2015/07/10/89480/omagine-completes-land-rights-registration-procedures-average-value-is-718614000/

http://gulfnewsjournal.com/stories/510626647-omagine-completes-land-rights-registration-process-for-omani-beachfront

Omagine completes land rights registration process for Omani beachfront

ByJamie Barrand|Monday, Jul 13, 2015 @ 5:51pm

Omagine LLC, a 60-percent-owned subsidiary of Omagine Inc., announced late last week that it has signed and registered with the government of Oman a usufruct agreement to secure Omagine’s ownership of the development rights on more than 245 acres of beachfront property located in Oman.

The land is part of the Omagine Project, a $2.5-billion development aimed at both tourism and real estate industries. The project development agreement was signed in October 2014. The following month, Omagine entered into a partnership with the Oman office of Savills, operating as Arabian Real Estate, to provide real estate services for the project.

In December 2014, Dubai, United Arab Emirates-based DTZ International Ltd. came on board to provide commercial real estate services. Financial services are being handled by PriceWaterhouseCoopers LLP.

The Omagine Project will include cultural, entertainment and residential facets.

Shareholders include Royal Court Affairs, 25 percent; two subsidiaries of Consolidated Contractors International Co., 15 percent; and Omagine Inc., 60 percent.

“The registration of the UA with the Government is a welcome milestone event,” said Frank Drohan, Omagine’s managing director and president. “Now that we have unfettered access to the land we are rapidly progressing the development of the Omagine Project and the finalization of the CCC contract. We have expended considerable effort and resources during the past many months.”

Sam Hamdan, Omagine’s deputy managing director, agreed.

“There is enormous investor and banking liquidity in Oman and the GCC,” he said. “With the Usufruct Agreement now registered and the imminent conclusion of our consultant reviews, we expect to be making several crucial consultant appointments in the coming months.”

More information can be found online atwww.omagine.com.

http://www.omanbulletin.com/story-z7220466

http://www.4-traders.com/OMAGINE-INC-13908501/news/Omagine–GCC-investors-eye-25bn-Omagine-Project-

http://www.menafn.com/1094279060/Funds-banks-show-keen-interest-in-USD25bn-Oman-project-Omagine&src

http://pmgulf.com/content/gcc-investors-eye-2-5bn-omagine-project-in-oman-constructionweekonline-construction-week-online/

http://asianetpakistan.com/business-finance/207479/omagine-completes-land-rights-registration-procedures-average-value-is-718614000/

http://www.designbuild-network.com/newsletter_daily.html

http://www.arabianindustry.com/construction/news/2015/jul/5/omagine-project-worth-25b

http://www.bahrainnewsgazette.com/omagine-completes/

http://pakistannewswire.net/omagine-completes-land-rights-registration-procedures-average-value-is-718614000/

http://arabnewsnetwork.ae/business/omagine-completes-land-rights-registration-procedures-average-value-is-718614000/

http://arabpressreleases.qa/business-finance/27019/omagine-completes-land-rights-registration-procedures-average-value-is-718614000/

http://iraqnewsgazette.com/omagine-completes-land-rights-registration-procedures-average-value-is-718614000/

Funds, banks show keen interest in $2.5bn Oman project: Omagine

Posted by AGORACOM-JC at 5:07 PM on Monday, July 13th, 2015

 

  • With enormous liquidity available in Oman and other GCC countries, investors, funds and banks in the region have shown a high level of interest in Oman’s upcoming US$2.5bn mixed-use tourism and real-estate project knows as the Omagine Project
  • Over the past six months, Omagine LLC has conducted many presentations with sovereign funds, investment funds and high net-worth individuals in Oman, Kuwait, Saudi Arabia, Qatar and UAE, who have indicated a high level of interest in becoming equity investors in the Omagine Project

By Gulam Ali Khan

July 12, 2015

Muscat – With enormous liquidity available in Oman and other GCC countries, investors, funds and banks in the region have shown a high level of interest in Oman’s upcoming US$2.5bn mixed-use tourism and real-estate project knows as the Omagine Project.

Over the past six months, Omagine LLC has conducted many presentations with sovereign funds, investment funds and high net-worth individuals in Oman, Kuwait, Saudi Arabia, Qatar and UAE, who have indicated a high level of interest in becoming equity investors in the Omagine Project, Omagine Inc said in a filing with the US Securities and Exchange Commission (SEC) on Friday.

Omagine Inc owns a 60 per cent stake in Omagine LLC, which is developing the project.

“We have witnessed a large appetite for both investing in Omagine’s equity and for providing project financing debt facilities for project development,” said Agron Telaku, Omagine’s vice president for finance.

He said banks with which Omagine and its contracting partner CCC have met have indicated that Omagine’s usufruct rights over the project land can and will be utilised as collateral to support project financing debt facilities. “We have also met with several very high net-worth investors who have indicated a high level of interest in becoming equity investors. These investor discussions are ongoing.”

Frank Drohan, managing director and president of Omagine, said, “There is enormous banking liquidity in Oman and the GCC. Over the past six months we have conducted, and will continue to conduct, numerous meetings with major local and international banks. We have witnessed a large appetite at such banks for providing project financing debt facilities for the Omagine Project’s development.”

Omagine LLC signed the usufruct agreement with Oman on July 1, whereby the sultanate’s government granted Omagine certain rights over the 1mn sqm beachfront land, which includes the right to sell the land on freehold basis.

Omagine had contracted three real-estate valuation firms – Savills, DTZ International and JLL – to provide Omagine with the value of the usufruct rights. The average of all three valuations was recorded at RO276.66mn, according to the filing with SEC.

“The registration of the usufruct agreement with the government is a welcome milestone event. Now that we have unfettered access to the land we are rapidly progressing on the development of the Omagine Project and the finalisation of the CCC construction contract,” Drohan said.

He said that the company has conducted exhaustive interviews and has reviewed multiple iterations of proposals from key consultants. “We now expect to be making several crucial consultant appointments in the coming several months, including: A financial advisor, hospitality advisor, real-estate advisor, master planner, engineering consultant, construction management consultant and programme manager.”

Read more: http://www.muscatdaily.com/Archive/Business/Funds-banks-show-keen-interest-in-2.5bn-Oman-project-Omagine-46b4/(language)/eng-GB#ixzz3fnQdcVjG

Omagine Completes Land Rights Registration Procedures; Average Value is $718,614,000

Posted by AGORACOM-JC at 3:13 PM on Thursday, July 9th, 2015

Omag

  • Announced that its 60% owned subsidiary, Omagine LLC, has signed and registered with the Government of Oman, a Usufruct Agreement which legally perfects Omagine’s ownership of the development rights over 245 acres of beachfront land
  • Average Value is $718,614,000

To establish the value of its Usufruct Rights Omagine contracted with three separate real-estate valuation firms, each of which is well known in Oman and Dubai and all of which have recognizable worldwide brands in the real-estate valuation business. Omagine is consulting with its IFRS accounting consultant, PriceWaterhouseCoopers LLP, and will soon determine, in conjunction with its auditors (Deloitte & Touche (M.E.) & Co. LLC) the correct method to properly record the $718,614,000 average value of its Usufruct Rights in its financial statements.

 

The shareholders of Omagine are:

i. Royal Court Affairs which owns 25%, and,

ii. Two subsidiaries of Consolidated Contractors International Company, SAL (“CCC”), which collectively own 15%, and

iii. Omagine, Inc. which owns 60%.

 

About Royal Court Affairs.

Royal Court Affairs is an Omani organization representing the interests of His Majesty, Sultan Qaboos bin Said, the ruler of Oman.

About Consolidated Contractors.

Consolidated Contractors International Company, SAL is a multi-national construction and engineering company with over $5 billion of annual revenue, 130,000 employees worldwide and operating subsidiaries in, among other places, every country in the Middle East and North Africa (the “MENA Region”).

About Omagine, Inc

Omagine, Inc. is a publicly traded U.S. company (Stock Symbol: OMAG) with 17,386,111 common shares presently outstanding. The Company is focused on real-estate, entertainment and hospitality opportunities in the MENA Region and on the design and development of unique tourism destinations that are thematically imbued with culturally aware, historically faithful, and scientifically accurate entertainment experiences. Governments in the MENA Region are seeking to diversify their economies and create employment for their citizens via the development of tourism destination projects. It is the Company’s opinion that this governmental strategic vision combined with the enormous financial resources in the MENA Region will continue to present superb development opportunities.

OMAGINE Signs Usufruct Agreement on $2.5B Oman Beachfront Development

Posted by AGORACOM-JC at 3:06 PM on Wednesday, July 1st, 2015

Signed a Usufruct Agreement with the Government of Oman whereby the Government granted LLC certain rights over the one million square meters (approximately 245 acres) of beachfront land which rights include the right to sell such land on a freehold basis. The land in Oman will be utilized by LLC for the development in of a mixed use tourism and residential project, the Omagine Project.

About the office of Royal Court Affairs.

The office of Royal Court Affairs is an Omani organization representing the interests of His Majesty, Sultan Qaboos bin Said, the ruler of Oman.

About Consolidated Contractors.

Consolidated Contractors International Company, SAL (“CCIC”) is a multi-national company headquartered in Athens, Greece. CCIC has approximately 5.5 billion dollars in annual revenue, 120,000 employees worldwide and operating subsidiaries in, among other places, every country in the Middle East and North Africa.

Hub On AGORACOM / Corporate Website / View 8-K Filing

Omagine In the News – Multiple Press Pieces

Posted by AGORACOM-JC at 12:49 PM on Tuesday, June 30th, 2015

http://the-mea.co.uk/news/omagine-sign-25bn-mixed-use-project-deal-july-1

http://www.gulfconstructiononline.com/stories/source/?url=/IND_285244.html

http://www.topix.com/world/oman/2015/06/1506309TH42P

http://kuwaitnris.com/agreement-on-omagine-project-to-be-signed-tomorrow/

http://timberexec.co.uk/agreement-on-omagine-project-to-be-signed-tomorrow/

http://ttnonline.com/ArticleTA/285245

http://mideaster.com/news/Agreement+on+Omagine+Project+to+be+signed+tomorrow

http://pmgulf.com/content/agreement-on-omagine-project-to-be-signed-tomorrow-construction-week-online/

http://morocco.shafaqna.com/EN/MA/200078

http://www.omanbulletin.com/story-z7174849

http://www.constructionweekonline.com/article-34235-agreement-on-omagine-project-to-be-signed-tomorrow/

http://www.arabianindustry.com/construction/news/2015/jun/30/agreement-on-omagine-project-to-be-signed-tomorrow-5083286/#.VZKi_vlVhHw

https://www.venturesonsite.com/news/key-usufruct-agreement-on-the-us-2-5-bn-omagine-project-to-be-inked-on-july-1st/

Regards,

AGORACOM