Is Oman doing enough to diversify its economy?
The sultanate’s current construction landscape is not for the faint of heart, but the shortlist for the Construction Week Oman Awards 2017 offers cause for optimism
Oman’s construction sector is in a difficult spot at present. Having been hit harder than most by the post-2014 oil-price decline, the sultanate finds itself facing tough decisions over which developments should go ahead, and in what form.
This uncertainty has resulted in a pronounced slowdown. The country’s construction market has been eerily quiet of late, and contractors and consultants are feeling the pinch.
It is within this less-than-ideal context that we head towards the Construction Week Oman Awards 2017, which will take place at the Grand Hyatt Muscat on Monday, 13 March. In this week’s issue, Construction Week’s panel of industry judges offer their collective assessment of the sultanate’s contemporary construction landscape (page 38).
To say that the panel’s views don’t make for comfortable reading would be an understatement. Second-time judge, Jamie Kellick, legal director at Addleshaw Goddard, describes the performance of Oman’s construction sector in 2016 as “sluggish at best”, adding: “It wouldn’t be alarmist to state that the market is the worst I have seen in 10 years of working in the Middle East, if not the worst I’ve ever seen.”
Fellow judge Andrew Jeffery, managing director of capital projects at Deloitte Middle East, agrees that this is a particularly challenging market, stating: “With contractors already experiencing very tight margins on many schemes, we see no respite. In fact, we anticipate more downward pressure on them to take work near to – or even below – cost, to secure their future order books.”
That said, panellists were able to identify some potentially bright spots on the horizon, albeit in the longer term. Robert Jackson, regional director of the Royal Institution of Chartered Surveyors (RICS), said: “Oman’s Five-Year Development Plan for 2016 to 2020 indicates that the country is emphasising growth in areas other than oil, due to reduced [national] revenues.”
It seems clear that Oman’s long-term prosperity will depend on the success of current efforts to diversify the country’s economy. If fruitful, such measures should serve to make the sultanate more robust in the face of market fluctuations.
With this in mind, it is encouraging to note that the shortlisted project nominees for this year’s CW Oman Awards comprise a varied selection of developments outside of the oil and gas sector (page 36). Projects within the segments of community, retail, corporate office, hospitality, residential, utilities, and transport infrastructure are all represented.
To pretend that Oman’s construction sector is over the worst would be naïve. No doubt, plenty of challenges lie ahead. Nevertheless, it would appear that both government and industry decision-makers are involving themselves in the right kinds of project. The going is certainly tough in the sultanate at present but, fortunately, the tough are already going.