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A number of sectors are expected to show healthy growth in the sector, with transport, electricity and water projects expecting to make strong improvements over the medium term
Muscat - On the back of international investments in Duqm, Oman's construction sector is expected to post a healthy growth in the coming years.
Global investors, mainly from China, are filling the funding gap caused by weak oil prices and the consequent cut by the government in its spending on infrastructure projects.
According to analysts, the Sino-Oman Industrial City, which is the result of Oman government's efforts to involve private partnership in major projects, will help underpin growth for construction activities in the Sultanate.
This, they say, will accelerate growth from an unexpected 2.4 per cent this year, the lowest since 2000, to 4.9 per cent by 2019.
"Although Oman possesses a degree of private investment in its construction sector, the state still plays a pre-eminent role in funding infrastructure projects, and as oil accounts for approximately 85 per cent of government revenue, the collapse in price has had a negative impact on its ability to finance projects," says David Lee, an infrastructure research analyst at Business Monitor International.
A number of sectors are expected to show healthy growth in the sector, with transport, electricity and water projects expecting to make strong improvements over the medium term.
"Growth in Oman's construction sector will come primarily from investment in transport infrastructure projects and the government's push for private partnership to mobilise investment in the construction sector. This will become increasingly important as global oil prices remain low, curbing government spending," adds Lee.
Residential and non-residential construction is also expecting a positive growth, supported by a growing tourism industry and popular support for various social infrastructure projects.
According to the agreement between Oman and China in May last, a consortium led by Ningxia China-Arab Wanfang, is planning three separate zones -- heavy manufacturing, light manufacturing and a mixed-use area.
The consortium which is formed of six private companies has the backing of the regional government from the Ningxia of northern China, is committed to developing at least 30 per cent of the site by 2022.
In all, 35 projects will be undertaken, including construction of an oil refinery capable of processing 235,000 barrels per day, a petrochemicals complex, a concrete plant, a steel smelter, a glass factory, an aluminium plant and a solar factory producing panels and batteries.
The city is being developed in about 11.7 square kilometres of land within the Special Economic Zone next to Duqm's port at a cost of $ 10.7 billion.
The city is expected to have facilities capable of housing a population of 25,000, including schools, offices, a hospital and a sports centre by this period.
A usufruct agreement to build a car assembly plant in joint investments between the Sultanate and Qatar at a cost of RO 160 million is also expected to give a boost to the construction activities.
Al-Khanji Real Estate Development Company "Aqar" gained land usufruct for the construction of a tourism project of about RO 390 million.
This multi-stage project would include hotels, residential and commercial compounds, and a recreational park.
© Oman Daily Observer 2016
