No impact from downturn on power distribution sector growth

Muscat - Investments in the expansion and modernisation of Oman's electricity distribution sector continued apace in 2015 undimmed by the economic slowdown unleashed by the international oil price collapse, according to a key power sector official.Eng Hamad bin Salim al Maghderi (pictured), Chairman of the Distribution Code Review Panel (DCRP), a grouping of the nation's five electricity

  
01 March 2016
Muscat - Investments in the expansion and modernisation of Oman's electricity distribution sector continued apace in 2015 undimmed by the economic slowdown unleashed by the international oil price collapse, according to a key power sector official.

Eng Hamad bin Salim al Maghderi (pictured), Chairman of the Distribution Code Review Panel (DCRP), a grouping of the nation's five electricity distribution companies and related stakeholders, said total investments in power distribution projects surged 27 per cent to RO 221 million last year, up from RO 174 million in 2014.

"The decline in oil prices has no impact whatsoever on the investment strategies of the distribution companies, which are implementing a concrete set of programmes endorsed by the government according to clear-cut timelines," Eng Al Maghderi said.

"Investments in the distribution infrastructure are dictated by electricity demand growth alone, and not by oil price volatility. As such, the projects in question are funded by the distribution companies from their internal resources, and are thus not subject to external economic factors," the official told journalists at DCRP's Ghala headquarters yesterday.

Operating under the auspices of the Sector Law, the DCRP groups the five distribution companies -- Muscat Electricity Distribution Co, Rural Areas Electricity Company (RAECO), Mazoon Electricity Co, Majan Electricity Co, and Dhofar Power Company.

Also sitting on the panel are representatives from the Authority for Electricity Regulation, Oman Electricity Transmission Company (OETC) and Oman Power and Water Procurement Company (OPWP).

Its principal mandate is to review, discuss and develop guidelines governing the safe and effective operation of electricity networks of up to 132 KV voltage in the Sultanate.

According to the official, significant investments were made by the distribution companies in developing the supply networks within their respective concession areas last year.

In addition to the construction of new networks and main transformer stations, sizable sums were spent in rolling out networks to new customers.

"The sector recorded strong growth last year as transmission and distribution networkers were augmented to cater to new industrial, commercial and retail customers, as well as new geographical areas," Al Maghderi, who is also CEO of RAECO, said.

"The number of customers increased to 993,880 by 2015-end, up 6.6 per cent from the previous year's tally of 932,208 customers. Electricity demand has also been growing at the rate of around 8 per cent annually. Output reached 14 gigawatt-hours last year," he added.

Further, in line with its remit to drive improvements in contracting services, material quality, HSE, and other requisites, the Panel accredited as many as 190 companies (including 159 small and medium enterprises) that have met its benchmarks to provide services to this sector, Al Maghderi said. However, he lamented the continued dearth of Grade A contractors with the requisite expertise and wherewithal to undertake large contracts.

Of the 18 Grade A contractors qualified to work in this segment, quite a few are focused outside of Oman, leaving an inadequate number to bid for domestic contracts.

Meanwhile, the DCRP is scheduled to hold its third annual forum on March 9 at the InterContinental Muscat Hotel under the auspices of Omar bin Khalfan al Wahaibi, Chief Executive Officer of Nama Group.

Focusing on the theme, 'Competency and Commitment', the forum will also deliberate on labour market concerns, as well as challenges faced by contractors and vendors, Al Maghderi said.

© Oman Daily Observer 2016


More From Energy