OMAN - Economy
Director General, Marketing & Media, PAIPED
Sayyid Faisal bin Turki Al Said spent his early career as Head of Planning and Development at the Omani Centre for Investment Promotion and Export Development (OCIPED), and during this period he played an instrumental role in the organization becoming ISO certified as well as organizing the Oman Economic Forum (1997, 1998) and the Oman Awards for Excellence (1998-2005). He also represented OCIPED on foreign missions. After 11 years with OCIPED, Sayyid Faisal was appointed COO of Brand Oman Management Unit (BOMU). He was also active in establishing the Al Amal Association, which aims to manage issues, services and programs related to those in Oman with both physical and intellectual disabilities. In 2012, he became the Vice-President of Oman’s Special Olympics Committee.
Raising Oman’s competitiveness and productivity is at the heart of what the Public Authority for Investment Promotion & Export Development (PAIPED) does. Boosting productivity is a matter of creating better links between education and industry and between technology and work. Indeed, we recognize that our prosperity depends on the wellbeing of our private sector. As part of the government’s Vision 2020, we aim to create sustainable development and a macroeconomic framework that empowers the business community and develops our human resources capacity. We’ve made significant progress in this area, and here I should like to highlight the outstanding and important work that is being carried out in specific sectors. The Public Establishment for Industrial Estates (PEIE), the umbrella organization for the management of industrial parks in Oman, introduced a long-term strategy for 2011-2025, which plans to add a total of 133 million sqm of new land to its current industrial estates. The goal is to make the private sector the engine of growth for Oman’s economy, and we at PAIPED are helping PEIE to attract foreign participation to meet that end. In the coming period, PEIE intends to invest over $180 million in large-scale extensions at industrial zones, which will provide more than 500 new plots to investors. Growth has surged in recent years, with total investment in industrial estates reaching $9.4 billion in 2011. Geography has proved to be a useful ally, as Oman is situated close to international trade routes. Opportunities as a global transshipment hub have been identified, and two of the most successful diversification projects of Vision 2020 have been the development of seaports. Today, Salalah Container Port competes with Abu Dhabi as the premier regional container hub. Our position as a trade hub has been exploited further by the establishment of free zones adjacent to the ports of Salalah and Sohar. So far, the zones have collectively attracted $3.5 billion in investment.
The 1,700-square-kilometer special economic zone (SEZ) at Duqm is another significant initiative for Oman and, with world-class infrastructure, we expect it to have a significant impact on our efforts to diversify Oman’s economy in line with Vision 2020. According to the zone’s master plan, there are numerous investment opportunities in Duqm, and over the next five years we expect it to receive between $6 billion and $8 billion of direct investment. The area around Duqm is also mineral rich with vast limestone, gypsum, salt, and dolomite deposits—this offers the possibility of it becoming a focus for mining and other associated industries. Given the work of the SEZ at Duqm, PEIE, and Oman’s industrial base, the Sultanate’s logistics and supply chain sector continues to grow and benefit from significant investment in infrastructure, warehousing, and transportation. The growth prospects and job opportunities in this positive sector are considerable as Oman seeks to take advantage of its strategic location outside the Strait of Hormuz and in close proximity to major shipping routes.
And you may ask what’s driving Oman’s logistic sector? The proposed GCC railway network will open up new, efficient, and cost-effective transport routes into the GCC market. The development of the railway network will be a game changer for Oman’s logistics industry. The proposed GCC Customs Union, which is scheduled to happen in 2015, will be vital to allow the free movement of goods within the GCC. The continuing development of Oman’s ports, roads, and airports are constantly increasing Oman’s logistics efficiency and capabilities. Following on from the development of the industrial port at Sohar and the adjoining free zone, we see a significant and increasing demand for warehousing, particularly as freight traffic is pushed up from Port Sultan Qaboos and the free zone develops. The Port of Salalah has developed rapidly to become a major global transshipment hub, with the focus now shifting to further development of the neighboring free zone. The development of Duqm as a new industrial port and city is still in its nascent stages. However, we fully expect large-scale logistics facilities demand and development in Duqm over the coming years. The current development of Muscat International Airport includes increasing the freight handling capacity from 100,000 to 260,000 tons per year. These projects clearly demonstrate the significant potential for Oman’s logistics sector.
Looking at tourism, the Ministry of Tourism predicts that more than 2,000 resort and hotel rooms will have been added in the 2012-13 period. The capital, Muscat, will experience maximum growth with nearly 726 new rooms, and there is an even spread of investment across the rest of Oman with niche resorts opening in Salalah, Khasab, and the Hajar Mountains. We are seeing strong investor demand in the tourism sector, especially in niche properties. This is a result of government-sponsored joint ventures through Oman and other private players. Overall, our approach is to ensure that five-star developments are located in natural landscapes. This approach gives us a competitive edge and fuels investment demand. Additional room supply also generates demand for improved products, with a recent example being the opening of Almouj Golf, a Greg Norman signature 18-hole golf course at The Wave, Muscat.
Significant investment commitment has been made in regional areas, such as Duqm, where three new hotels with a total of 391 rooms will be opened. Duqm City Hotel, Oman’s first pre-fabricated 120-room business hotel opened mid-2012 and Crowne Plaza Duqm is now open for business and will host the Muscat Youth Summit in December 2013. There has also been huge interest in Oman’s high altitude Hajar Mountains, where both government and private sector investment are on the rise. In response to the increasing number of tourists, three major resorts in Jebel Akhdar have been invested in. This is in addition to the Sunrise Resort on Jebel Asarh near Jebel Shams, which opened in early 2012. Property group Muriya opened its Sifawy Boutique Hotel at Jebel Sifah, 50 kilometers east of Muscat, in early 2012. Its Juweira Boutique Hotel at Salalah Beach opened mid-year. And this year we will see more hotels opening at Jebel Sifah and Salalah Beach.
Oman’s entry into the global business and meetings market will also accelerate with the opening of the $400 million Oman Convention and Exhibition Centre (OCEC) in 2015. The OCEC project comprises a 3,000 seat plenary hall, 40,000 sqm of exhibition space, a business center, and four hotels totaling 1,000 rooms. Moreover, the re-development of Port Sultan Qaboos as a cruise-liner facility will have a major economic impact on both Muttrah and Muscat.
Fueling Oman’s tourism, industrial, and logistics sectors is government spending in infrastructure. The government implemented 12 new projects from its Eighth Five-Year Plan at a total cost of $4.23 billion in 2012. These will add to the on-going Five-Year Plan projects, currently totaling $17.9 billion in value. Projects include the construction of the $2.59 billion Al Batinah Expressway and the Sur-Bidbid and Mahdha-Al Rawda dual carriageways. It is also important to mention the road-link project between Oman and Saudi Arabia. The road will pass through the Empty Quarter, one of the largest deserts in the world, and will facilitate trade between the two countries as well as pave the way for the economic development of the Dhahirah region.
The planned $16 billion railway project will also boost Oman’s economic growth and sustainable development at the national and regional level and enhance economic integration, while also facilitating trade. The total length of the railway project in the Sultanate will be approximately 1,061 kilometers, extending from the line that connects the wilayat of Al Buraimi and Al Ain in the UAE to the wilayat of Sohar (136 kilometers), Sohar to the Muscat Governorate (242 kilometers), and Muscat to the wilayat of Duqm (486 kilometers). To ensure better connections with airports, ports, and power plants, the project will also include a number of sub branches in Al Buraimi (27 kilometers) to Sohar Industrial Port (8 kilometers), the central train station in Muscat near Muscat International Airport (20 kilometers), and the wilayat of Ibra (84 kilometers).
The railway line has been designed to carry passenger trains running at speeds of 200 kilometers per hour, and between 80 kilometers to 120 kilometers per hour for cargo trains.
With 3,165 kilometers of pristine coastline and a deep drop-off ocean shelf, Oman is a prime candidate for aquaculture. In recent years, the Omani government has expressed a desire to grow aquaculture operations, both as a means of diversifying the national economy and as a way to ensure domestic food security needs. The Omani aquaculture sector offers an array of potential opportunities for investors. Musandum and the Al Batinah, in particular, offer maximum potential.
Spearheaded by the Information Technology Authority, the use of IT to make government more responsible and in the process empower the citizens of our growing nation to make more of their lives is imperative. And, by 2015, we aim to move all government services online.
We believe that a government that is excelling in IT services is more productive, competitive, and efficient. Indeed, in recent years, the government has taken steps to make Oman an attractive place for high-tech businesses and innovation. In 2003, we opened Knowledge Oasis Muscat, a 68-hectare technology park that is today home to IT businesses from the Middle East, Asia, Europe, and North America. We are conscious that investors need certainty and transparency and Oman offers that. And my organization is busy working with international investors and businesses to ensure we can deliver on our plans and attract the right investment. I encourage prospective investors to make contact with PAIPED, and work with us to build new partnerships and support shared ambitions. By working together, we can seize the opportunities for mutual growth.