Bloomberg Businessweek Middle East : Oman Country Report 2018 by UMS International

16 November, 2018 ● Businessweekme.com

New cities are rising around the world, but does the reality match the plan? p47

Algeria…..…..…........DZD 215 Bahrain….......................BHD 1

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Egypt……............…...... EGP 18 Iraq……...…..…...... IQD 3200

Jordan....….........….......JOD 2 Kuwait….......…......KWD 0.75

Lebanon..............LBP 4000 Libya…........................LYD 3.5

Oman…….................…..OMR 1 Qatar……….................…QR 10

Saudi Arabia.........…SAR 10 Syria............................SYP 200

UAE...…....…..…........…AED 10 Yemen…..................YER 600

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SPECIAL REPORT:

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Oman’s increased focus on economic diversification and developing the travel and tourism sector has begun to show its positive effects on the economy

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Steady Growth

ECONOMY

he Sultanate of Oman’s economy is projected to achieve continued positive growth during 2018, supported by gradually rebounding oil prices and rising economic diversification efforts on the part of the government. Trade balance rose almost 50 per cent to reach a value of RO1.266 billion $3.29bn) during the first quarter of this year, up from RO 857 million for the corresponding period of 2017, according to the Central Bank of Oman (CBO). Omani crude averaged $63.9 per barrel during the first half of this year (January-June) as against $51.8 per barrel for the same period of last year, the CBO said. The recovery in oil price since the second half of 2017 resulted in hydrocarbon sector growth at 20.8 per cent during the year in comparison with a decline of 20.7 per cent in 2016 and 39.2 per cent in 2015, according to the Central Bank. Economic growth in the Sultanate is set to modestly recover over the medium term with GDP expect-

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ed to increase by 2.3 per cent in 2018 and 2.5 per cent in 2019, according to World Bank outlook for Oman. In 2018, a boost in the hydrocarbon sector is expected to drive the recovery as the Khazzan gas production expands. In the outer years, as the OPEC restrictions on oil supply are lifted and as the gradual recovery of oil prices improves confidence and encourages private sector investment, GDP growth is projected to rebound to 2.9 per cent by 2020. Focussed attention on economic diversification seem to be paying off as Oman’s Budget 2018 in hindsight reflects the country’s improving economic sentiments. The 2018 Budget broadly aligns with the Ninth Five-Year Development plan. The targets set out are linked with an aim to increase Oman’s growth rates through stimulation of the private sector and creation of more jobs for citizens of the country. The government is currently working towards revamping certain critically important laws, including the public-private partnership (PPP) law and the foreign capital investment

law. The aim is to facilitate private sector investment and increase the ease of doing business. The focus of the government is not only to improve the investment climate and promote public-private partnerships to stimulate economic growth and sustain employment but also ensuring swift implementation of the National Programme for Enhancing Economic Diversification (Tanfeedh) initiatives. The government has set aside RO1.2bn to ensure prompt completion of ongoing development projects and also to make timely payments. Investment projects carried out by state-owned-enterprises (SOEs) during 2018 are estimated to cost RO3bn. This will give a further boost to economic activity, accelerate economic growth and create more jobs. Despite the financial and economic challenges affecting investment activities and capital markets in the region, the privatisation scheme is being continued. This is essential to promote and expand participation of private sector in the economic activities. Ac-

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SPECIAL ADVERTISING SECTION cording to the scheme, six SOEs are being planned for privatisation during 2018. The total projected spending will amount to RO12.5bn, an increase of 6.8 per cent against the previous year. Revenues are estimated at RO9.5bn, leaving a budget deficit of RO3 bn, a level of 10 per cent of GDP. Value-added tax (VAT) in Oman, which appears to be delayed until 2019, may have a positive impact by further driving down the declining budgeted fiscal deficit. When VAT is enacted in Oman, as per the International Monetary Fund estimates, it could account for 1.5 to 2 per cent of GDP (or 2.5 to 3.5 per cent of non-oil revenues). The oil and gas production expenditures are estimated at RO2.1bn, up by 15 per cent compared with 2017 budget estimates. This includes the cost of oil and gas production, and expenses required to maintain future oil and gas production, as well as enhance oil reserves. With increased activities in Duqm, tourism sector and logistics sectors, economic growth should gather pace in 2018. The revenue of RO9.5 bn is 9 per cent higher than what was budgeted in 2017, and 3 per cent higher than 2017 actuals. The rebounding of oil price has helped in bringing down the deficit to 10 per cent of GDP. Despite the continued economic challenges posed by geo-economic factors, the government has projected a GDP growth of 3 per cent for 2018. This indicates that the 2018 budget reflects improving economic sentiment. The budgeted deficit for 2018 is estimated to be RO3bn as compared to 2016 actual deficit of RO5.3bn, which is a remarkable improvement of 44 per cent over a two-year period. Should oil prices remain close to $70, Oman’s deficit for 2018 could be considerably lower than expected. The focus continues to be on diversification with enhanced contribution from the private sector, in-country value,

“When VAT is enacted in Oman, as per the International Monetary Fund estimates, it could account for 1.5 to 2 per cent of GDP”

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Bank Muscat Assists Small Businesses Supporting the growth of small businesses, Bank Muscat najahi products and services have created a benchmark, helping them overcome hurdles and chart successful ventures using the bank’s products. Bank Muscat najahi products have been designed keeping in mind the unique requirement of the MSMEs; translating the vision and directive of His Majesty Sultan Qaboos bin Said to stimulate an entrepreneurial mindset. Securing credit without collaterals and accessing innovative banking services have been hurdles faced by micro and small businesses. The specially designed najahi products include credit facilities without collaterals to develop and grow micro and small businesses. With najahi, Bank Muscat fulfills the primary need of finance for the micro and small business segment. The najahi suite of products include the value added najahi Current Account, najahi Flexi Loan to support working capital, business expansion and other business needs; najahi Business Credit Card; najahi Contractors Loan to help complete contracted jobs; najahi Contractors Bill Discounting to get immediate funds after completing contracted jobs and Najahi PoS Receivables financing for customers who use PoS machines for their sales. The najahi Business Debit Card offers a daily withdrawal limit of RO 1000. The higher withdrawal limit helps customers to meet day-to-day cash requirements. najahi customers can also avail multiple debit cards on the same account allowing authorised persons to make transactions on behalf of the company. Maintaining cash flow is a challenge faced by small businesses. Addressing this critical need, najahi Flexi Loan facility gives customers the power to choose when to avail a loan and for what period. The key features of najahi PoS receivables financing includes daily installment repayments. A small amount is automatically deducted daily from customers’ bank account to repay loan. The convenience and speed of najahi PoS receivables finance help customers to meet their urgent requirement of funds. public-private partnership, national initiative to create 25,000 new jobs, privatisation of certain state owned entities and to continue spending on the social sectors such as education and healthcare. Oil and gas revenue for 2018 is expected to increase by 9 per cent compared to the 2017 budget. The estimates take into account reduced production pledged by the government in line with the OPEC production agreement, as well as anticipated production from the Khazzan-Makarem gas field. The government has been pursuing its diversification strategy since the past several years and many avenues have been opened. Public private participation in various projects, Tanfeedh and changes in the investment law are the core areas where the government is focusing. Tanfeedh is a national initiative, which is part of the 9th Five-Year Development Plan

(2016-2020). The targeted sectors are manufacturing, tourism, transport and logistics, mining, and fisheries. The programme will focus on raising the contribution of these sectors to the Sultanate’s Gross Domestic Product (GDP), increasing investment in these sectors, and creating more job opportunities. PUBLIC PRIVATE PARTNERSHIP Oman with the geopolitical stability, state-of-the-art infrastructural facilities and investment-friendly environment, is well placed to attract further investment by facilitating PPP initiatives and foreign capital/bankruptcy laws. Investment is the main driver for economic growth. In developing the economy, public investment is the major investment stream. The government has to maintain this lead, but with a special emphasis on PPP initiatives and strategy to enhance non-oil revenue.

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TOURISM

he government of Oman is making tourism a central plank of its economic strategy, with mega plans to enhance its appeal among tourists from across the globe with a series of initiatives such as better air connectivity and airport facilities, hotels and resorts, and an e-visa facility. The idea is to help the country mature from being an ‘emerging’ tourism market into an established one with a high-volume of repeat guests and a diverse range of feeder markets. An ambitious stride towards making tourism one of the most significant

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income generators in the Sultanate has been the 2040 Tourism Strategy which provides a comprehensive blueprint for tourism development in Oman and outlines a series of targets for the country’s tourism sector. The strategy unveiled by the Ministry of Tourism is a clearly defined road map aimed at making tourism one of the most important economic pillars for the country’s future. The implementation of the strategy would avail more than 500,000 jobs by the end of 2040, with the total investment in the sector expected to touch RO19bn of which only 12 per cent will be by the public sector.

The contribution of tourism sector to the GDP would range between 6 to 10 per cent. Maitha Saif Al Mahrouqi, undersecretary of the Ministry of Tourism, said: “The tourism sector in the Sultanate is witnessing a remarkable annual growth with statistical indicators pointing out the increase in the number of tourists and visitors; as well as the launch of new tourism projects and hotel facilities around the Sultanate reinforced by the governmental efforts in further developing the vital projects and the infrastructures related to tourism, in addition to facilitating and creating tourism

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SPECIAL ADVERTISING SECTION related initiatives.” The country is investing heavily in its tourism and hospitality infrastructure as it aims to host seven million tourists by 2040, including 2.7 million in Muscat. Investment in the tourism industry will increase the number of jobs within tourism to 45,000 by 2020, as the country looks to expand its economy, moving it from away from traditional oil-and-gas sources of income. According to a projection by Colliers International, tourism arrivals to Oman will increase at a compound annual growth rate (CAGR) of 13 per cent between 2018 and 2021, which will be driven by visitors from across the Gulf region, which accounted for 48 per cent of guests in 2017. In addition, arrivals from India (10 per cent), Germany (6 per cent), the United Kingdom (5 per cent) and the Philippines (3 per cent) are also expected to contribute immensely to the growth, supported by easy visa procedures and improved flight connections. A report by the Implementation, Support and Follow-up Unit has laid out the long-term strategies for key areas listed under Tanfeedh, the national drive for economic expansion, and plans to increase the contribution of tourism to the country’s GDP to RO1.5 billion by 2020. The contribution of travel and tourism to GDP in 2017 was RO849.5 million, or 3.2 per cent of total GDP, according to the World Travel and Tourism Council’s annual report 2018. In addition, this strategy also plans to increase private sector investment in tourism to RO1.8 billion by 2020. Investment in integrated tourism complexes and mixed-use developments will run into several billion dollars. These investments are the fruits of partnerships with local and international investors, as well as leading hospitality brands that work hand-in-hand with the government. The opening of the Sultanate’s tourism sector would be realised through relaxing entry rules for visas into the country, a large part of which has already been done. Unsponsored visas are now available for nationalities of over 67 countries, and lately include Iran, Russia and China. Indian nationals with a valid US or Schengen Visa, can also apply online. A FILLIP FOR AVIATION The recent opening of Oman’s new Muscat International Airport is expected to further strengthen the growth of the aviation sector in the country. The airport has a capacity to handle 40 flights per hour with 86 check-in counters, 40 gates, and 29 aircraft stands with passenger boarding bridges, as well as a new control tower. The decision to build a new airport was taken after studies found that there could be a 40 per cent growth in number of visitors to Oman by 2019. The new terminal has a capacity to handle 12 million passengers per annum, which can be scaled up to 24 million, 36 million and 48 million in different phases if needed. The new terminal will have the capacity to handle large aircraft such as the Airbus A380 and the Boeing 747. The existing terminal will be used for low-cost carrier operations. The number of passengers at Muscat International Airport ex-

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“We have different projects going on simultaneously. The first project is the Oman Convection and Exhibition Centre (OCEC), which is currently 90 per cent finished” – Peter Walichnowski, CEO of Omran,

ceeded 14 million in 2017, a robust growth of 17 per cent over the previous year. Similarly, Salalah International Airport also broke its record with a 24 per cent growth at 1.5 million passengers as a result of an increase in both domestic and international travel. Presently, the Muscat International Airport is ranked in the top 10 airports in the Middle East, with an average annual growth forecast of 8 per cent. Apart from international airports in two major cities, there is a move to attract tourists to the interior regions by building airports and other infrastructure in Duqm and Sohar. With Duqm’s new airport now open, projects at the heart of Oman’s future economic powerhouse are all set to speed up, further driving the Sultanate’s economic expansion.

A MODERN DOWNTOWN Oman Tourism Development Company (Omran), the executive arm of the government of Oman for the development of the tourism sector, has been entrusted with strengthening and diversifying the national economy to support Oman’s Vision 2040 through pioneering tourism infrastructure and lifestyle development across the Sultanate. Madinat Al Irfan is the Sultanate’s largest urban development project and is set to contribute to Oman Vision 2040. In the years to come, Madinat Al Irfan will have major positive national implications, contributing approximately RO400mn to the local economy. The eastern area (phase 1) currently being developed by Omran sits alongside Wadi Park just minutes from the newly opened Muscat International Airport. It is a multi-use district adjoining the Oman Convention & Exhibition Centre (OCEC), a venue for international conferenc-

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“The tourism sector in the Sultanate is witnessing a remarkable annual growth with statistical indicators pointing out the increase in the number of tourists and visitors” – Maitha Saif Al Mahrouqi

TOURISM

es, trade shows and concerts. OCEC, which celebrated its second anniversary recently, helps the government to strengthen the country’s position as a leading meetings, incentives, conferences and exhibitions destination in the region. Talking about the current status of the phase 1, Peter Walichnowski, CEO of Omran, says: “We have different projects going on simultaneously. The first project is the Oman Convection and Exhibition Centre (OCEC), which is currently 90 per cent finished. The construction of OCEC will be finished 100 per cent by the end of 2018. This will allow us to fully open up to the international MICE market. We completed Crowne Plaza Hotel in 2017 and this year we will complete the Marriott Hotel which will support the exhibition

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500k $49b

Tourism-related jobs Oman hopes to Expected Investment in Omani tourcreate by 2040 ism industry in 2040

centre. We have recently signed a management agreement with AccorHotels to open the first ibis Styles in Oman.” Omran and Majid Al Futtaim announced a strategic partnership to develop the western area (phase 2) of Madinat Al Irfan. The joint venture will see the development of a vibrant mixed-use community that will serve as the new urban centre for Muscat. This new partnership plays a major role in Oman national economic diversification agenda and reflects Omran’s strategic role as a catalyst of investment that forges solid partnerships with trusted developers like Majid Al Futtaim to create sustainable urban destinations and significant socio-economic benefits to the Sultanate. The new mixed-use community is located at the western area of Madinat Al Irfan and spans over 4.5 million sqm. The joint venture project investment value is estimated at RO5bn over a period of 20 years and is anticipated to create more than 30,000 direct and indirect jobs in the country. Centrally located in Muscat’s urban corridor, the development will become the gateway to Oman; creating a modern downtown for residents, businesses and visitors. MINA QABOOS WATERFRONT Complementing its hotel pipeline, the Sultanate has made significant investments in other tourism infrastructure facilities. In yet another major initiative, Mina Qaboos Waterfront project planned in Muscat port will usher in a new concept in port developments in the Sultanate. The new port concept is a kind of waterfront port catering to cruise ships, as well as investments in hotels, restaurants, cafes and so on. Omran and Dubai-based DAMAC International, inked a landmark agreement to redevelop Muscat Port into a worldclass mix use waterfront destination. The capital expenditure of the project is estimated at $1 billion. The old commercial harbour is proposed to be transformed into an integrated tourist

Flights per hour that Muscat International Airport can handle

port and lifestyle destination that includes hotels, residences, as well as a dining, retail, leisure and community facilities designed to position Muscat as a top waterfront destination in the governorate. The proposed Mina Sultan Qaboos Waterfront project will include berths for cruise ships, a marina for super yachts and leisure ports, 4 and 5-star marina hotels, hotel-operated branded residential apartments, waterside restaurants, cafes and boutiques, conference and banquet facilities, entertainment and cultural facilities, fisherman’s wharf, and historic souq. INVESTMENT IN INTERIORS Plans to develop the interior areas of the Sultanate as part of the country’s long-term tourism strategy are now underway. Developing these areas was part of the government’s tourism plan under the Future Vision 2040, which involves economic diversification and less reliance on fossil fuels to guard the nation’s economy. Under this plan, the governorates of Muscat, Musandam, Dakhiliyah and South Sharqiyah will first be targeted. The government is focusing on developing employment for the future generation, as well as developing other parts of Oman. A key component of the strategy is cluster planning. The strategy will use five planning concepts, namely tourism sites, planning attractions, planning resorts, national interest planning and itinerary planning. One of the most important objectives that the Oman tourism strategy seeks to achieve is increasing the contribution of tourism sector into the GDP, in collaboration with sustainable development practices currently taking place in other economic sectors. Musandam has been earmarked as a coastal wilderness destination and Dakhiliyah as a heritage, nature and adventure destination, due to the presence of the governorate’s key UNESCO listed forts, castles, falaj systems and traditional villages.

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Hub of Aviation Sheikh Aimen Al Hosni, CEO, Oman Airports Management Company, discusses the rapid development of Oman’s aviation sector and what it means for the wider economy.

AVIATION

Are you seeing passenger growth overall? Overall, our performance is very positive. We are performing better than many other airports in the Middle East, especially during these challenging times in the region. We’ve seen a 7% increase on our passenger numbers in the last year across all our airports, including a 15% increase in transfer passengers in Muscat, which has been made possible through forging and nurturing strong relationships with our airline and other partners. The opening of the new Muscat International Airport in March 2018 has helped us achieve an increase in our revenue. Our new retail and duty free offer a wonderful product portfolio which can compete with the best airports globally. Passenger experience has also improved significantly since opening the new airport and our satisfaction scores have improved across multiple indicators, reflecting passenger satisfaction with the new airport infrastructure and services offered. Quarter 3 scores in the ACI- ASQ survey (an airport benchmark quality survey) have ranked Muscat Airport 20th Best Airport in the world in the 5-15 million passengers airport category. Salalah Airport is also performing very well and experienced a record breaking Khareef season this year, with over 630,000 tourists visiting the region, compared to around 470,000 in the same period in 2017. After opening a new airport in Salalah in 2015, we have been ranked 6th Best Airport in Q3 2018 in the under 2 million passengers category, based on the ACI-ASQ results. Salalah is also ranked number two out of all Airports in the Middle East. There has been steady growth in Muscat in our cargo market in the last 12 months, helped by the opening of a new cargo facility in March 2018, with a capacity of up to 380k tonnes. This is definitely a targeted growth area for Oman Airports over the coming years, and we will be working closely with our national stakeholders and international partners to continue to improve and manage the cargo market in Oman. Tell me about some of the key developments over the past 18 months The last few years has seen an incredible period of maturing and growth in the aviation sector in Oman. We have opened three airports in three years, with the start of operations at the new Salalah Airport in June 2015, the opening of the new Muscat Interna-

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tional Airport in March 2018 and the opening of the new Duqm airport in September 2018. Each of these new airports provides state of the art infrastructure and facilities to passengers and raises the bar on customer experience through our airports. It also raises the expectations of our stakeholders and our customers: We have been investing heavily in new technologies and exploring innovative approaches, both in terms of our systems and our processes, to make sure we continue to meet and hopefully exceed these expectations. We’ve also been investing heavily in our human capital. Our people have a great sense of pride in representing their country and are an absolutely vital part of our success. Like many top companies around the world, we’ve been exploring how our culture drives our performance and have been actively promoting colleague engagement and supporting leadership development, so our people can truly invest themselves when they come to work. Over the last 18 months we’ve seen this focus deliver considerable benefits across all areas of our business. How much was invested in these projects and how will they transform Oman Airports? We are incredibly fortunate to have been able to work in partnership with the Government of the Sultanate of Oman to open new airports for the nation. The scale of the projects to build and open the new airports is unprecedented in Oman in terms of investment, profile and prestige. 10 years in the planning, the new Muscat International Airport terminal cost US$1.8bn and the Salalah terminal cost US$0.95bn, with further investment in ancillary infrastructure, including roads. There is no comparison between the old world airports and the new; every single part of the service offering for customers and the systems behind our operations is different. In Muscat a 44-year-old 52,000 sqm building, has been replaced with a new 580,000sqm terminal, with a capacity of 20 million and the airports have already been developed to allow for future expansion in line with the airports’ Master plans. All airports also now have boarding bridges, improved retail space and fully integrated systems and control centres, allowing us to provide a much higher quality of service to airlines and passengers. Indeed, the new infrastructure is absolutely essential to be able to deliver the level of service that our customers expect and to help us achieve our vision to become and remain a top 20 airport in the world by 2020.

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Asyad is working to turn Oman’s logistics assets into attractive opportunities for investors, to secure trade volumes for the industry and to maintain business growth

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Gateways to future growth LOGISTICS & UTILITIES

orts are becoming gamechangers for the Sultanate’s long-term economic growth, with the government and policy makers identifying the potential of the logistics industry to supplant the hydrocarbon sector as the nation’s economic mainstay. Through an ambitious ‘the Sultanate of Oman Logistics Strategy (SOLS) 2040’, the government of Oman is looking to boost investments in its transport and logistics sector and double the employment in the sector to 80,000 as well as its GDP contribution to RO3bn by 2020. Oman Global Logistics Group (rebranded as Asyad in June 2017) was formed to consolidate state holdings in the country’s seaports, free zones, and maritime and land transport companies- will be responsible for implementing SOLS. Asyad has two primary mandates; the first is to maximise returns on the government’s investment in ports, freezones and transport companies. Secondly, Asyad is responsible for executing SOLS with the vision to build a competitive logistics sector as an instrumental contributor to the national GDP. SOLS’ vision will be achieved through facilitating trade and enhancing regulations; building world-class

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infrastructure; leveraging technology as a disruptive enabler and building human capacity and skills, which will not only attract business and investors, but will also improve the sector’s ranking in global indices such as the Logistics Performance Index (LPI). Oman has three major ports, strategically located in Sohar, Salalah and Duqm; each has its own unique offering and selling proposition. They are getting kitted out either with massive infrastructure development (Sohar and Duqm) or with new business development strategies (Salalah) to meet the new expectations. (Parenthetically, Sultan Qaboos Port in Muscat which was converted into a tourism port is undergoing an amazing metamorphosis worth billions of rials). Sohar is emerging as one of the region’s prime logistical hubs. Sohar Port and Freezone is a remarkable infrastruc-

ture development not just for Oman, but for the entire region. Not only has it seen consistent year-on-year growth since it was fist established, attracting investments totaling more than $25bn to-date, but also it is a key aspect of the Oman government’s national logistics strategy. The Port of Salalah, the largest port in Oman, continues its aggressive focus on retaining and growing the existing business. Meanwhile, the port is implementing its overall strategy to reduce reliance on the transshipment business on the container terminal side and on limestone and gypsum exports in the general cargo side. While transshipment of containers and handling of aggregates are expected to form the core

“Asyad team is working on a business plan to identify the value proposition of each port. The Group’s role is to harness collective integration, connectivity and positive competitiveness among Omani ports”

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SPECIAL ADVERTISING SECTION of the business in the near term, there are a number of initiatives and projects at various stages of discussion that will leverage the existing connectivity of Salalah and its location and also reduce the overall reliance of the transshipment business. Construction is in full swing at Port Duqm with the phase 1 expected to be completed by the end of 2019. A lot of infrastructure development projects are being implemented in and around the port. Construction of all the terminals is getting underway. They include container terminal, liquid terminal, dry bulk facilities, and multipurpose terminal. Before introducing the Asyad umbrella, each port was marketing its services independently- missing out on the opportunity of joining forces to offer a more comprehensive value proposition, deliver a full-suite solution and cater to different needs of the market. Abdulrahman Salim Al Hatmi, Group CEO of Asyad, says: “Today, Asyad team is working on a business plan to identify the value proposition of each port. The Group’s role is to harness collective integration, connectivity and positive competitiveness among Omani ports. And it aims to turn its logistics assets into attractive opportunities for investors, to secure trade volumes for the industry and to maintain business growth. On the freight side, Oman Rail Company, Oman Shipping Company, Oman Drydock Company are under Asyad’s purview. The Group has a twopronged plan – one is to integrate the current portfolio of services including Oman Shipping, Oman Rail – in the future – and the trucking business, which will support assets and companies run by the private sector. This integration will result in providing its customers with an all-encompassing solution, making it more convenient and more efficient for them to do business in the Sultanate. “Asyad also has a mission to grow and acquire business internationally by offering its services in logistics and freight outside Oman. The Group is studying the possibility of buying freight-oriented companies to complement our operations and solidify our competitive advantage,” Al Hatmi adds. There has been some tangible results in the development of logistics sector during the last four years since the strategy came into being. For example, Oman’s rank on the World Bank’s recently released Logistics Performance Index (LPI) saw an improvement of 16 positions from 59 to 43. Such a jump is

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not possible without the multi-layered plan Asyad has designed and started implementing, from modifying regulations and procedures; to streamlining operations and governance; and to harnessing connectivity and integration of logistics assets. Oman showed marked improvement in the efficiency of customs services and timeliness. These improvements drove Oman’s continued climb up the international rankings. Key initiatives that have contributed to Oman’s improved ranking include establishment of the border One-Stop-Shops for joint inspections, new rules for Bonded Warehouses, Introduction of the Authorised Economic Operator programme, Pre-Clearance of Goods by Customs and Risk-based import controls. Other initiatives include preparations to join the International Road Trans-

port Convention, enhancing partnership between public and private sectors through focus groups and forums and formation of the Oman Logistics Association to represent the interests of the logistics sector. To further strengthen its logistics capabilities, Oman has introduced worldclass guidelines and systems to make logistics an appealing profession for Omani youth and to attract international investors. The government’s logistics awareness programme aims to guide university and college students undertaking academic and applied research to address the needs of Oman’s logistics sector. The sector had 30,000 jobs when Oman started implementing the strategy. The total number of jobs in the sector went up to 84,000 which include 54,000 jobs created over the last four years.

Power of Privatisation Nama Holding (NH), Oman’s electricity and water utility, recently announced its plans for privatising electricity transmission and distribution companies. A spokesperson for the organisation reveals details of the plans. What’s the background to NH’s privatisation plans? On 8 October 2018, Nama Holding announced the partial privatisation of five of its fully owned subsidiaries that are engaged in the transmission, distribution and supply of electricity in Oman. This global announcement was followed by publishing a Public Invitation, seeking “Expression of Interest” (EOI) from qualified interested parties to the partial privatisation for two companies namely - Oman Electricity Transmission Company (OETC) and Muscat Electricity Distribution Company (MEDC). NH conducted a road show on 12-13 November 2018 in London and on 19 November 2018 in Muscat in relation to this privatisation process.

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How much of the government stakes are being divested off from each companies? NH plans to divest up to 49% equity stake in Oman Electricity Transmission Company (OETC); and up to 70% equity stake in Muscat Electricity Distribution Company (MEDC) and other three electricity distribution and supply companies that will be initiated later. Are there any international investors or partners involved? The public announcement was made in international market and NH aims to divest the shares of these companies to the most qualified strategic technical and financial investor, without any geographical restriction. The expected sales proceeds is subject to internal valuation of these companies and an assessment of the offers received. What are the major trends and other developments in Oman’s utility sector? The electricity and related water sector in Oman went through an extensive restructuring in 2005, followed by a complete privatisation of the electricity generation sector over the last 15 years. Oman has experienced strong electricity demand growth for over 10 years. While there were some temporary slowdown in overall economic activities due to lower oil prices in the recent path, the economy is currently on the recovery mode and robust demand growth is expected to continue in the near-to-medium-term.

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