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Oman Infrastructure Report Q4 2010

Business Intelligence
September 23, 2010
64 Pages - SKU: BTAI2831126

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Countries covered: Oman

The sultanate’s infrastructure sector is primed to remain one of the most active in the region, supported by strong state spending and the economy’s relative insulation from the downturn - as well as the country’s long-standing focus on reforming its investment climate to make it as inviting as possible to foreign investors. There are some downsides, however: in the critical energy and utilities sector, the government has been indecisive over plans for proposed independent power and water projects at Ghubrah and Duqm. These long-standing schemes now appear to be in doubt, after the main utlity company, Oman Power & Water Company, announced plans for a Greenfield IPP at Sur, apparently in place of the two aforementioned power plants. This is likely to delay the onset of new power capacity, at a time of spiralling demand for electricity. Nonetheless, we are confident that Oman will keep the broad thrust of its infrastructure development on track.

Recent developments support this core view:

Sustaining the counter-cyclical thrust that has seen the sultanate’s infrastructure sector defy the regional downturn, a slate of projects across the utilities and transport sectors will keep activity on an upward trajectory. The construction industry, valued at US$3.7bn this year, should register growth rates of around 5% in the next three years, which beats many of its neighbours which are experiencing a slower emergence from the real estate downturn that hit some Gulf states particularly hard in 2008.

The invitation of two bids for project management and design work for the rail project during Q2 10 suggests momentum is building for the Omani link in the ambitious Gulf-wide rail network project, which is due for completion by 2017.

Road projects have gained prominence in the past year. Budget allocations for road building has more than doubled to OMR1.7bn in the 2010 budget, and a host of new contract awards confirm activity in this key sector.

Aviation investment is also on an upward trajectory. The contract for the second phase of the Ras al Hadd airport, a contract worth over US$100mn, was awarded to Oman’s Galfar Engineering & Contracting in February 2010. In April 2010, it was reported that six companies were competing for the US$100mn contract for the second phase of Sohar airport. In July 2010, the new Adam Airport in Dahiliyah region was inaugurated, ahead of the star-tup of commercial operations in 2012. The airport will be able to handle 250,000 passengers a year.

There is growing interest in Oman’s infrastructure sector from foreign developers, including from other Gulf states. In August 2010, Saudi Arabia’s ACWA Power International announced the acquisition of a 58% stake in the Barka 1 IWPP, based on a share purchase agreement with the AES Corporation, IDB Infrastructure Fund and their subsidiaries. ! Oman’s construction industry is estimated to have posted substantial real growth of 14.21% year-on-year (y-o-y) in 2009, to reach a value of OMR1.31bn (US$3.39bn). The industry has been buoyed by a small number of large projects, which are adding substantial value to the currently small sized industry.

The transport sector is one of the key areas generating value added growth for the construction industry. Between 2010 and 2014 we are forecasting Oman’s construction industry to grow by 5.8% on average per year. These are upside risks to this figure, considering the small size of the industry, and the large number of high value projects underway and planned.

Executive Summary: SWOT Analysis; Oman Infrastructure Industry SWOT; Oman Infrastructure Project Finance SWOT; Oman Economic SWOT; Oman Political SWOT; Market Overview; Oman; Industry Forecast Scenario
Table: Oman--Construction & Industry Data: Construction and Infrastructure Forecast Scenario; Transport Infrastructure; Transport Infrastructure Overview; Major Projects - New And Ongoing Projects; Airports; Ports; Road Networks; Rail Networks; Major Projects Table - Transport
Table: Oman Major Infrastructure Projects - Transport: Energy And Utilities Infrastructure; Energy And Utilities Infrastructure Overview; Major Projects - New And Ongoing Projects; Power Plants And Transmission Grids; Water; Major Projects Table - Energy and Utilities
Table: Major Infrastructure Projects - Energy & Utilities: Business Environment; Oman Business Environment Overview; Rewards; Risks; Regional Overview; Middle East Infrastructure Business Environment Ratings
Table: Regional Infrastructure Business Environment Ratings: Project Finance Ratings; Design and Construction; Commissioning and Operating; Overall Project Finance Rating; Regional Overview; Project Finance Ratings: Outlook For Middle East
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating: Macroeconomic Outlook
Table: Oman - Economic Activity, 2007-2014: Political Outlook; Domestic Politics; Company Monitor; Galfar Engineering and Contracting; Global Overview; Core Views; BMI's Core Views For Infrastructure Sector; Methodology; Industry Forecasts; Construction Industry; Data Methodology; Construction; Capital Investment; Construction Sector Employment; Infrastructure Business Environment Ratings; Ratings Overview
Table: Infrastructure Business Environment Indicators: Project Finance Ratings
Table: Design And Construction Phase
Table: Commissioning And Operating Phase - Commercial Construction
Table: Commissioning And Operating Phase - Energy And Utilities
Table: Commissioning And Operating Phase - Transport: Sources

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Oman Infrastructure Report Q4 2010

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