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Jan 03 2006

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Oman: Government to speed up disinvestment in line with privatisation plan

MUSCAT -- The government is set to speed up disinvestment of stakes in state-owned companies in line with the privatisation plan in various sectors. The cabinet has already cleared a proposal to disinvest government stake in Oman Flour Mills , a semi-government firm listed on the Muscat Securities Market (MSM), said the Minister of National Economy Ahmed bin Abdulnabi Macki.

The government is holding 55 per cent stake in the company's capital. Addressing a press conference to announce the budget proposals, Macki said the government is carrying out a detailed study to disinvest stakes in Oman Fisheries Company , Oman Chromite, Golden Tulip Hotel and Oman National Transport Company. The government has 24 per cent (3 million out of 12.5 million shares) holding in Oman Fisheries, which is also listed on the MSM.

Another study is going on to privatise the post and telegraph sector. "A decision on privatisation will be taken by the end of the year", he added. Last year, a company has been formed for carrying out post and telegrah services. On the privatisation of power companies, he said in order to offer shares to the public, the companies will have to be in existence for three years. Then only the government can proceed with privatisation programme.

However, he noted that the government has already floated a tender to sell the ownership of Rusayl Power Company, which is the one among the nine successor firms formed after transferring the assets of the Ministry of Housing, Electricity and Water. Although many sectors have been identified for privatisation, power and telecommunication are the two areas where the programme was successful. Macki said the work on expanding Seeb and Salalah airports would commence soon.

A consultancy agency has been assigned to study the expansion plan. The minister also said the government is carrying out another feasibility study to establish airports at Ras al Hadd, Sohar and Duqm. The minister said the manufacturing sector is expected to contribute 13 per cent of GDP this year as against 14 per cent last year. But the contribution of the sector will increase to 18 to 20 per cent by 2010. The strategy of the government is to speed up economic diversification by developing gas-based industries and thereby reducing the country's dependence on oil revenue.