PPP contract signed to manage and expand Oman's Rusayl Industrial City
Madayn-Mubadrah agreement will see $130m spent in 2019 to expand Rusayl industrial estate
Oman’s Public Establishment for Industrial Estates, also known as Madayn, has signed an agreement with Oman Investment and Development Holding Co (Mubadrah) to develop and manage the 11km2 Rusayl Industrial City.
Rusayl will be Oman’s first industrial estate to be managed and operated according to the sultanate’s regulations for the private sector, and is part of Madayn’s commitment to Oman’s push towards public-private partnerships (PPP). The latter was formalised by the system (law) of the Public Establishment for Industrial Estates issued by Royal Decree No. 32/2015. The decree paves the way for Madayn to contract “one or more developers who are eligible and have technical, financial, and administrative efficiency to develop the zone or part thereof under an investment agreement”, according to a statement.
The agreed timeline between both firms provides Madayn to plan, regulate, monitor, and follow-up on Rusayl Industrial City by 2022, while Mubadrah’s role will cover development, management, and operations as the estate’s main developer. It will also focus on attracting local and international developers as key operators of new estates.
What Mubadrah will invest
Hilal bin Hamad Al Hasani, chairman of Mubadrah’s board of directors, said his company’s work at Rusayl will serve as a model for future Madayn estates in the sultanate, adding that the company will also spend millions in the next few years to expand and rehabilitate Rusayl.
“Rusayl Industrial City needs to accelerate the pace of its many operations, especially those related to the rehabilitation of infrastructure, public utilities and acceleration of the required services,” Al Hasani continued.
“In 2019, around $130m (OMR50m) will be allocated to implement the expansion phases in Rusayl Industrial City and rehabilitate the existing phases.”
Starting 1 January, 2019, Mubadrah’s management and operation work at Rusayl will include the leasing of its land plots and existing buildings and facilities. Moreover, the company will also promote the city to local investors, and “contract qualified service providers, in addition to managing and organising the operations defined by the agreement”, Al Hasani explained.
Mubadrah will manage the construction and operation of basic service facilities, such as sewage, water networks, and electricity, as well as work on the “sustainability and safety of the infrastructure and superstructures in Rusayl”, according to a statement. The company’s implementation plans, in coordination with Madayn, will also cover roads, water, telecom and electricity networks, and rainwater drainage, in addition to the establishment of residential areas and tourist resorts to serve the investing companies, as well as logistics projects, power plants, water desalination plants, drilling of wells, and purification plants.
Mustafa bin Maqbool Al Lawati, acting chief executive officer of Mubadrah, said the company would invest in solar panel and cost-effective electricity services, adding: “We have already started negotiating with international companies in this field and work is underway to obtain licenses from the competent authorities in the sultanate, [and we] expect this project to progress in 2019.”
Madayn and the road ahead
Rusayl Industrial City was established through Royal Decree No. 51/1983, and inaugurated on 4 December, 1985 under the patronage of HH Sayyid Thuwaini bin Shihab Al Said, Personal Representative of His Majesty the Sultan at that time.
Commenting on the agreement, HE Eng Ahmed bin Hassan Al Dheeb, chairman of Madayn’s board of directors, said: “This [deal] will be evaluated, and based on the results, the rest of the estates will be transformed according to an approved timeline that will last for four years.
“This comes in line with Madayn’s adopted approach to strengthen PPPs, especially in the field of constructing, managing and operating the industrial estates and the economic areas through attracting major developers to all the new industrial estates. The PPP approach also opens the way for the private sector to work under the umbrella of Madayn as owners and developers of the economic areas of a variety of investment activities.”