Judges quizzed ahead of the CW Oman Awards 2017
With the Construction Week Oman Awards 2017 just days away, this year’s industry judges provide their expert perspectives of the sultanate’s contemporary construction landscape
Now in their sixth year, the Construction Week Oman Awards 2017 will see almost 50 shortlisted nominations go head to head across 12 industry categories. For each category, one winner will be selected by an independent panel of judges. But before this year’s victors are announced, Construction Week asked its judges to offer their perspectives on the sultanate’s construction landscape.
Andrew Jeffery, managing director of capital projects at Deloitte Middle East, admits that these are challenging times for Oman’s construction community. He explains: “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 at near to – or even below – cost, to secure their future order books. New project starts are slowing, with demand side dynamics reducing, as market confidence continues to erode.
“It is difficult to say how much and for how long the market will struggle, but volumes are likely to continue to fall. We are again in the cycle where projects are being deferred, delayed, or simply put on hold, similar to the last economic dip. The key indicator to reversing this trend will be a recovery in oil prices,” adds Jeffery.
Jamie Kellick, legal director at Addleshaw Goddard, agrees with Jeffery. “Last year, Oman’s construction market was sluggish at best,” he says. “With a greater number of projects being scrapped, and the highest amounts of certified sums remaining unpaid, 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 have ever seen.
“Contractors that continue to win work in Oman in 2017 appreciate that cash flow is going to be tight, so effective budgetary management will be crucial – not only in terms seeing projects through to completion, but also in order to survive in the longer term,” he explains.
Robert Jackson, regional director of the Royal Institution of Chartered Surveyors (RICS), concedes that the current situation is grave, but notes that the country is taking steps to diversify in a bid to secure longer-term prosperity.
“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. Focal points include tourism, fisheries, and mining, among others. Opportunities for building contractors should include tourism projects in the near future. Public-private partnership (PPP) for infrastructure is another possible source of work, but only for major engineering and construction consortia,” he explains.
Sachin Kerur, managing partner for the Middle East region at Pinsent Masons, is also of the opinion that diversification holds the key to Oman’s long-term success. “Last year was challenging, but not without some cause for optimism,” he notes. “Payment terms remain lengthy, but equally important are the adversarial positions that have been adopted by some project stakeholders; a more solution-driven attitude may be warranted in these conditions.
“There are opportunities in the utilities sector, and tourism-related developments are aligned with the government’s wish to diversify its economy. The market may well be soft in certain areas, particularly if the government remains inclined to scale back capital spending but, generally speaking, the market should hold up,” he adds.
Wayne Taylor, group health, safety, and environment (HSE) head at S&T Interiors and Contracting, points out that the sultanate must work to address its shortage of skilled construction professionals if a recovery is to gain momentum.
“The most commonly mentioned trend for 2017 has been the continued effects of the skilled worker shortage,” he explains. “A significant portion of the employees who left the industry during the recession never returned, and companies are still struggling to find workers – at all levels – to properly staff their teams. This is likely to continue; in line with uncertainty in the oil markets.”
Anthony Pereira, chartered member of the Chartered Institute of Building (CIOB), says that despite current challenges, Oman can look forward to some major project deliveries in 2017. “It will continue to be a tough year for the construction industry in Oman,” he laments. “We are still feeling the effects of the oil price crash and the budget deficit that it created. Despite that fact, many large-scale developments will be delivered this year, such as the completion of Al Batinah Expressway and, hopefully, [the expansion of] Muscat International Airport.
“We should also see some major new projects get underway, such as the construction phase of Mall of Oman, and the Salam Yiti golf resort. Private investments and PPP projects will continue to provide opportunities. As long as market sentiment and oil prices continue to gradually improve, by the end of the year, I believe the outlook will be far more positive than it was at the beginning of 2017,” Pereira concludes.
Meet the judges
Andrew Jeffery, managing director of capital projects, Deloitte Middle East
Anthony Pereira, chartered member, Chartered Institute of Building
David Hutton, project director, Aecom Oman
Jamie Kellick, legal director, Addleshaw Goddard
Robert Jackson, regional director, Royal Institution of Chartered Surveyors
Sachin Kerur, managing partner –Middle East region, Pinsent Masons
Wayne Taylor, Group HSE head, S&T Interiors and Contracting