Mall of Oman Coming Soon

Coming Soon: the Mall of Oman

Dubai-based developer Majid Al Futtaim Properties (MAFP) is about to embark on an ambitious building spree throughout the Middle East and North Africa (MENA.) On the list of construction projects slated to go up between 2014 and 2016 are hotels, complementary mixed-use communities, and of course shopping malls. The ‘Mall of Oman’ is planned to be constructed in the Bauwsher district of Muscat, and is budgeted to cost about OMR 180 million ($467 million.)

The mall will be the largest in the Sultanate when it is completed with 350 retail shops, entertainment center and restaurants in a space occupying 157,000 square meters.

George Kostas, CEO of Majid Al Futtaim Properties said: “Oman’s new shopping and entertainment destination is expected to generate 1500 jobs for its construction and a further 3500 jobs once opened, and will enhance the Sultanate’s retail and entertainment offering for both residents and tourists. The Mall of Oman will also provide an opportunity for our retail partners to further establish their businesses in the Muscat market.”

The MAFP group has three business units including shopping malls, hotels and housing developments. They are invested in or manage 12 income producing properties in the United Arab Emirates, Oman, Bahrain, Egypt and Lebanon.

Chief Executive Officer Iyad Malas of MAFP commented:

“The year 2013 was a year of solid top line growth for the business. Revenue growth remained stable at 10 per cent year-on-year, while Ebitda grew to 11 per cent, reflecting strong performance across all parts of the business. We not only delivered robust business results but have also increased efficiency by uniting our companies under one umbrella corporate brand — Majid Al Futtaim — as we embark on the next chapter of our regional expansion plans.”

Oman Reducing Expat Workforce

In an effort to employ more Omani citizens in the private sector, officials of this Gulf State announced that they will be replacing about 100,000 foreign workers with Omanis. Sheikh Abdullah bin Nasser Al Bakri, Minister of Manpower in the Sultanate, confirmed that the government would like to see a reduction in the expat work force by about 33 percent, from the 39 percent it stands at now.

The public sector expat workforce accounts for 692,867 workers. If the most recent goals are met the number will be reduced to 586,272 within the coming year. The imbalance is even more skewed in the private sector where there are 1,308,981 expat employees out of a total workforce of 1,533,679 employees. Only 224,698 private sector workers are Omani citizens.

Oman is afraid that it will not be able to sustain continued expansion of the public sector workforce and is therefore taking steps to place more Omanis into private sector jobs. Omani officials foresee a public sector wage bill rise of $2.3 billion this year in wake of the royal command to standardize salaries and grades throughout the public sector. Between 2011 and 2013 Oman greatly increased government spending on welfare programs, public sector salaries and creation of jobs in order to meet the demands of protestors demanding more jobs and the elimination of corruption.
The International Monetary Fund stepped in to warn Oman to control government spending. They urged the Sultanate to increase non-oil revenues to side-step never-ending budget deficits.

Oman Climbed Ranks as a Best Country to do Business

Oman Rising as a Business-Friendly Country

Moving 12 positions in just one year, Oman went from the 55th in 2013 to the 43rd best country out of the worlds’ Best Countries for Doing Business in 2014. The survey is conducted each year by Bloomberg, evaluating six broad criteria which are indicative of a country’s friendliness to business including the degree of economic integration, the cost of setting up a business, the cost of labor and materials, the cost of moving goods, the readiness of the local consumer base and less-tangible costs.

Hong Kong kept its place at the top of the list receiving a score of 83.4 out of a possible 100. In second and third places were Canada and the United States, respectively. Oman shared the 43rd spot with Russia with a score of 61.6 points.

Oman improved its overall score this year through bettering “the cost of moving goods,” which includes exports and import efficiencies, transportation improvements, logistics performance, liner shipping connectivity, and the quality of port infrastructure.

“The environment for doing business in Oman ranks favorably at the international level. Oman has positively improved its position and is continuing to improve further. The climb in global rankings should be encouraging to do more in the areas that require more attention,” said Dr. Fabio Scacciavillani, chief economist at the Oman Investment Fund.

Scacciavillani added that Oman’s free-zones have helped to create a more business-friendly environment. Improvements in airports, roads, ports, and logistics infrastructure will continue to help Oman to improve its ranking among the world’s most business friendly countries.

“Oman’s other major strengths for doing business are easy taxation, low inflation and safety and security,” added Dr. Scacciavillani.

Abu Dhabi Company wins Contract to Construct Pipelines for Omani Oil Company

According to the Emirates News Agency, the Oman Oil Company Exploration and

Said bin Ahmed Al-Shanfari, Oman’s Minister of Petroleum and Minerals

Production LLC (OOCEP) awarded a $40 million contract to National Petroleum Construction Company (NPCC.)

OOCEP is an oil and gas subsidiary of Oman Oil Company. The deal is a procurement and construction (EPC) contract for the installation of two new offshore pipelines in the area of Musandam.

The planned offshore pipeline will bring in imported well liquids from the Bukha field to the Musandam Gas Plant to be processed. There will also be an offshore export pipeline built to bring natural gas from Musandam to Saqr Port in Ras al Khaimah.

The combined length of the two pipelines is over 30 kilometers. They will be installed below water as deep as 90 meters in places.

This coveted contract, worth almost $40 million will give NPCC a much-desired entry into the profitable Omani market. The contract matches the company’s business plan and expansion strategy.

NPCC was formed in 1973, is based in Abu Dhabi, and is owned in partnership with UAE’s Senaat (70 percent) and Consolidated Contractors International.

Oman Says No to Nuclear Power

Fukushima Nulear Power Plant After Earthquake

The Omani representative to the International Atomic Energy Agency (IAEA) explained to an audience in Oman that the Sultanate has made the decision that it will not pursue the development of nuclear power as a source of electricity. It has not, however, ruled out Omani research into the use of nuclear power for scientific and medical purposes.

Oman’s Ambassador to Austria and permanent member of the IAEA, Dr. Badr bin Mohammed al Hinai said Oman came to this decision as a result of the Japanese nuclear disaster at Fukushima two years ago.

“After the Fukushima accident and following the safety and security concerns of establishing a nuclear program, Oman followed the examples of other countries such as Japan and Germany not to pursue a nuclear program but instead, to benefit from nuclear power applications.

“Let us mention that Oman is also seeking alternative sources of energy in solar, wind and wave energy, due to the propitious climate and geography of the region.”

Dr. Al Hinai was speaking at the third annual three-day Oman Power and Water Summit, jointly sponsored by the IQPC Middle East and Global Exhibitions and Conferences (GEC) together with the Public Authority for Electricity and Water.

Tourism Growing in Oman

The mild Omani climate coupled with the Muscat Festival and the Tour of Oman has helped to create a surge in visitors to the Sultanate. As the tourists visit some of Oman’s most famous sites and landmarks they are helping increase revenue to the country.

Boats baring visitors from such faraway lands as Germany, Italy and Sweden are docking at the Port Sultan Qaboos and dropping off tourists by the hundreds, and then bringing them all along the coast of Oman and elsewhere.
The tourism sector of the economy has been a major contributor of late to the general rise in Oman’s GDP.

According to the Muscat-based tour agency Nishad,

“The tourist inflow to the country is tremendous this year and what makes the total visitors different this time is the fact that they are from various countries ranging from Italy, Germany, France, Greece, and South Africa unlike last time where majority was from Germany”.

Oman Boosting Healthcare Budget for 2013

The government of Oman is planning on increasing funds allocated for healthcare by 9.4 percent over what was spent in 2012, officials announced. In 2012 Oman spent RO 500 million, and plans to spend RO 547 million this coming year. That figure would make the healthcare expenditure about five percent of the total budget for Oman for the year, which is RO 12.9 billion.

Total number of hospital beds is also expected to increase in 2013. A new hospital is planned for construction in Mahout at a cost of about RO 8 million. The Jalan Central Hospital will cost about RO 35 million, set to be built in South Sharqiyah. Also being planned are several regional health centers in various local authorities in Oman at a cost of about RO 6.4 million.

His Excellency Dr. Ahmed bin Mohammed bin Obaid al Saeedi, Health Minister of Oman, said that the country should have their plan for the 2050 health system ready during the first half of 2013.

Oman’s Soaring Surplus to Help Finance Government Expansion

Rising Oil Prices Helping Oman Finance Government Expansion

Oman’s fiscal surplus has soared over the past seven months by a factor of five, according to government data. The surplus was fueled by rising prices of oil and increased production, and outpaced even what was a large increase in public expenditures.

The actual surplus for the first seven months of 2012 came to RO 2.041 billion ($5.31 billion) while the surplus for the same time period in 2011 was only RO 442.3 million ($1.150.3 billion.)

Most of the surplus came from an increase by 34 percent in oil export earnings due to a rise in Oman’s oil production. In addition the price of Oman’s crude oil rose from about $100 per barrel to an average of $113.2 per barrel during the same period, further boosting the surplus.

Oman has five billion barrels of proven oil reserves under its control, as well as 25 trillion cubic feet of natural gas. Government officials are planning on increasing government spending over the next few years in its 2011 through 2015 development plan by a huge 113 percent.

Historic Maiden Flight Takes Omanis to Tehran

Oman Air’s Inaugural Flight to Tehran

Oman Air is now offering a brand new route directly from Muscat to the Imam Khomeini International Airport in Tehran. Upon conclusion of the first flight, which took place on September 1st, the passengers were greeted by Oman’s ambassador to Iran and Iran’s ambassador to Oman, after each of them was presented with a symbolic rose. In the presence of other dignitaries a cake-cutting ceremony was held at the airport.

In addition the Omanis were welcomed by Captain Hamid Reza Pahlevani, Deputy Minister of Roads and Housing and Head of Civil Aviation; Morteza Dehghan IKA, Director General of Airport, and other officials.

Wayne Pearce, Oman Air’s chief executive officer, offered these comments on the occasion:

“We are delighted to have welcomed passengers to today’s inaugural flights of Oman Air’s new daily service between Muscat and Tehran. This new route, the 42nd within our ever-growing network, links two of the world’s great cities and offers travelers between the two capitals the opportunity to experience Oman Air’s unique passenger experience and to discover why Oman Air has attracted so many international awards.

“We are grateful that the Omani Ambassador to Iran and the Iranian Ambassador to Oman were able to join us in celebrating the launch of this new service and we look forward to it soon becoming one of Oman Air’s most successful routes.”

The new service will utilize Oman Air’s newest plane, the Embraer E175 regional jet, which will offer 11 business class seats and 60 in economy class. The new service instituted by Oman Air comes directly on the heels of their recognition at this summer’s World Airline Awards where the airline won “World’s Best Business Class Airline Seat” and place in the top-ten of eight other categories, including “Best Airline Service Staff in the Middle East.”

Sharia- Compliant Al Izz Islamic Bank to Issue IPO Soon After Eid Holiday

Al Izz Islamic Bank

Islam’s second Sharia-compliant bank could be approved for an IPO as early as next month if all goes smoothly as regulators examine the application of Al Izz Islamic Bank, headquartered in Muscat, Oman.

Observers say that officials at the bank are moving full steam ahead and issue managers are also making a large effort to have everything ready for the bank’s IPO to happen as soon as possible after the Eid holiday, most likely that will mean September.

The only problematic link in the progress of obtaining approval will come from CMA, the market overseer for compliance, which has still not bestowed final approval for Al Izz Islamic Bank’s IPO, although they have received an “in principal” approval from the regulatory board.

Interested parties have said that getting approval is not a major stumbling block, as it can take only one day for approval to be granted, and within a week the issue can be allowed. The subscription period however must be a full 30 days.