Industry Forecasts Oman’s infrastructure sector has been one of the most resilient in the world to the global economic downturn. We estimate that real construction sector industry value will increase by 13.2% in 2009 (to a total industry value of OMR1.31bn/US$3.39bn), against a backdrop where many countries experienced significant negative real sector growth. This relatively strong performance, however, should be considered against real growth of 31% in 2008 and 28% in 2007 – so in absolute terms, this is still quite a slowdown.
Overall, the extremely high growth in Oman’s construction output in recent years has created a high base of activity, so growth rates are likely to stabilise from here. Against this backdrop, we expect real construction sector growth of just under 5% per annum across the period 2010-2012, before a slight acceleration in 2013 and 2014.
Latest Developments Significant activity continued in Oman’s infrastructure sector during September and October, although the rate of new developments moderated after a deluge of news (particularly in the power sector) in July and August. One key development, however, was the awarding of technical and financial advisory contracts for the US$2bn Duqm Independent Water and Power Project (IWPP), the country’s first coalfired power plant. This paves the way for requests for proposals (RFPs) for the main construction contract; RFPs are expected in Q210, while the main contract is due to be awarded in Q410. The other main news since our last update is the award of US$387mn contract to India’s Nagarjuna Construction Company for the second phase of the Batinah coastal road.
Infrastructure Business Environment And Project Finance Risk Ratings Oman scores well in our newly updated Infrastructure Business Environment ratings. The country is in second place in the region (behind only Qatar) out of a total of 10 countries in our index. Oman scores particularly well for the market risks variable, and its country structure is also solid. For our project finance risk ratings, Oman is again in second place (this time behind only Bahrain). A very strong score for our commissioning and operating category underpins the country’s rating.
