Leaders Oman: Market predictions for 2016
Sarooj’s Simon Karam and CCC’s Bassam Addada consider what 2016 will entail for Omani construction, and suggest prudent courses of action for the Sultanate’s decision makers
Leaders in Construction Summit Oman commenced with a panel discussion between Simon Karam, chairman of Al Taher Group and director of Sarooj Construction Company, and Bassam Addada, area general manager of Consolidated Contractors Company (CCC). The duo took to the stage to offer a macro view of the year ahead.
“The word ‘economy’ is derived from the Greek term for keeping house,” Karam began. “When challenges arise and your income is reduced, you have to rearrange your house. It is no secret that our income has been reduced.
“But the Omani population is known for its pragmatism. It is neither overly optimistic nor unduly pessimistic. The past has taught us how to face situations like very low oil prices. [Furthermore], the reputation of Oman is excellent. We can borrow money and we have our reserve funds. Therefore, we can look at the future not with pessimism, but with pragmatism,” Karam explained.
CCC’s Addada pointed out that the impact of low oil prices is likely to worsen for some. He therefore called on the Sultanate’s construction professionals to diversify their businesses in preparation for the “rough years” that lie ahead.
“In terms of low oil prices, we have not yet felt the full impact,” he said. “This is because most projects are still running, and their budgets, so to speak, are [set]. Even so, the industry could face challenging times if things don’t pick up.
“I think that the diversification of income is very important. Oil is Oman’s main source of income but unfortunately, the price of extraction here is higher than in other Arab countries,” added Addada.
Karam went on to emphasise the need for public-private partnership (PPP) investment within Oman’s construction sector. This model of funding, he contends, will enable the country to push forward with infrastructure development, which will in turn drive business for contractors and consultants.
“People talk about government money [versus] the private sector. I would like to talk about combining both. PPP is good news for the construction industry,” noted Karam.
Concluding the session, Addada returned to the theme of pragmatism, stating: “We must look at the picture and not deny it. Hoping that things will improve tomorrow will not work. We definitely have to shrink; we have to tighten our belts and cut expenditure.
“We must be [prudent], but at the same time, we shouldn’t be suicidal in terms of bidding. This would not create a healthy environment. We can achieve many things, providing we spend wisely and get consultants involved [throughout] our contracting activities. These are the people who think of new ways to reduce costs to the client,” Addada told the audience.