Hard graft

The crackdown on corruption in Oman has claimed a high-profile victim

COMMENT, Business

The news which broke last week about the decision by an Omani court to jail Galfar Engineering & Contracting’s managing director, P Mohamed Ali, will have sent a shockwave throughout the industry in the Sultanate. Ali received a three-year jail term and was ordered to pay a fine of around $1.6m (OR600,000) after being found guilty of bribing a member of the finance ministry, Juma Al Hinai, who had responsibility for overseeing the tenders committee for the state-owned oil firm, Petroleum Development Oman (PDO).

Al Hinai was also jailed for three years and fined $1.6m, as well as being banned from holding public office for 20 years after the court ruled that he accepted a $520,000 (OR200,000) bribe to facilitate Galfar and extend the length of one PDO contract.

Galfar said in a statement that defence lawyers for Ali and the company’s business development manager (who was convicted for complicity in facilitating bribes) have already indicated that they intend to appeal the judgment. Therefore, the verdict should not be seen as set in stone as it could potentially be overturned at a later date.

However, one thing that the case tells us is how seriously the Omani government is taking its corruption probe.

Ali is not just another boss of a construction firm. He is the man who founded Galfar, which is Oman’s biggest publicly-listed construction company, more than 40 years ago. The company had revenues of $875m in 2012 and its current market cap stands at over $260m.

Not only that, but Ali has been a longstanding spokesman for the industry. Until recently, he was chairman of the Oman Society of Constructors.

Indeed, he had been so highly respected that he has received the highest honour that the Sultanate bestows on non-nationals - the Oman Civil Order Award. In short, he is one of the leading businessmen in the country.

Moreover, although this case is one of the first to find its way to court, it won’t be the last, with a further 20 government and private sector officials due to take the stand in the not-too-distant future.

Such a crackdown can only be seen as a positive for international companies looking to get involved in the Sultanate’s construction market, where Government-led infrastructure spending alone is forecasted to be worth $56bn from 2013-17.

The Omani government has led the way in the GCC towards making its tender processes as open and transparent as possible.

This isn’t just a course of action that is desirable, but necessary. Oman still needs to bring in skills and knowledge from international firms in certain areas – particularly rail, where five international consultants submitted bids to project manage the country’s new national rail network last year.

The firms bidding for such projects need to know that they are operating in a market that has a level playing field in order to justify the time and money spent in tendering.

If they lack faith in a particular country or market, there are plenty of other opportunities in nearby territories that they will be able to pursue in the coming years.

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