With large international investments in Duqm, Oman’s contruction sector looks encouraging in the following years.
The fundraising gaps resulted from low oil prices and the subsequent cuts in government spending on infrastructure projects have been covered by global investors, majority from China.
Analysts predicted that the Sino-Oman Industrial City – the result of the Omani government’s efforts to involve private partnerships in major projects, will help underpin growth in the sultanate’s construction industry, reported the Oman Daily Observer. Hance, advacning growth from an unexpected 2.4% this year – the lowest since 2000 – to 4.9% by 2019, analysts said.
“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,” David Lee, an infrastructure research analyst at Business Monitor International, was quoted as saying in the report.
Additionally, other sectors are also estimated to be promising in the midium term; in transport, electricity and water projects.
“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,” Lee said.
The growing tourism and favoured support for social infrastructure are expected to boost the residential and non-residential construction.
In May 2015, an agreement was signed between Oman and China, which would see a consortium develop three separate zones – heavy manufacturing, light manufacturing and a mixed-use area.
Source: ME Construction News