Boston, MA -- (SBWire) -- 10/02/2013 --Having registered very volatile growth that has periodically reached impressive highs since 2001, Oman's construction industry has now started to slow. Oman's Central Bank reported construction industry real growth of 1.6% and 1.9% in 2011 and 2012 respectively, which has prompted us to revise down our forecast for 2013 to 2.2%. Despite an extensive pipeline of infrastructure projects, several of them are reaching completion which will likely sap momentum from the industry. We expect moderate growth to be maintained in the short-term on the back of the government's five-year (2011-2015), US$78bn spending plan and investment associated with a burgeoning tourism industry. Over the longer term, we forecast slow economic growth as a result of declining oil revenues, which threaten to undermine the government's ambitious infrastructure spending plans.
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Key developments in the sector:
- Growing demand for water in Oman is seeing the usual players winning contracts for new projects. ACWA Power and Malakoff International, two of the biggest names in the GCC independent water and power space are developing desalination plants in the country. Despite downgrades to the country's water demand outlook, the regulatory framework in Oman will protect investors, as long-term water purchase agreements are signed to support projects. Consequently, we continue to see Oman's Independent Water Project segment as an attractive sector for developers. Oman Power & Water Procurement Company (OPWP) has two important projects on the pipeline - Quarayyat and Suwayq - which will expand capacity by 405,000 cubic metres per day (m3/d) by 2018. Further along the list are the Barka and Ghubra projects, which will have a notable impact on capacity from late 2013.
- The Port of Duqm in Oman is to award US$285mn of construction contracts, divided into two packages. One of the contracts will be for the support infrastructure, the gate, offices and roads, while the other will be for paving, crane rails and utilities. Work is planned to be completed in Q115.
- In April 2013 Oman International Container Terminal (OICT) started construction work on its modern terminal at the Port of Sohar in Oman. The project will increase the terminal's container handling capacity to 1.5mn twenty-foot equivalent units (TEUs) from the current 800,000TEUs. The project will entail an estimated investment of nearly OMR50mn (US$129.5mn). The second phase of the terminal's development project centring Terminal D will entail further expansion scheduled to be concluded by 2018. The completion will add further capacity of 2.5mn TEUs.
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"Oman Infrastructure Report Q4 2013" Published
New Construction market report from Business Monitor International: "Oman Infrastructure Report Q4 2013"