$1.8bn Oman port on track despite turmoil

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Sunday, 22 February 2009

Oman will build a 692 million Omani rial ($1.8 billion) port at Duqm as part of its economic development plan despite a global downturn and a projected drop in oil revenue, Minister of National Economy Ahmed Mekki said. The government expects "reasonable growth" this year despite the financial crunch in part because it aims to pursue all the major state-led development projects it has launched, using surplus oil revenue or state reserves, if needed, he said. "The 2009 outlook is relatively good ... we expect a reasonable growth since we are going ahead with all major plans," Mekki said. Oman plans to diversify its economy away from oil income dependency, which makes up about 75 per cent of national revenue, and is pursuing a number of large-scale infrastructure projects. The government has already awarded 220m rials worth of infrastructural projects since the beginning of the year, according to the state figures. Last week, Oman said it has shortlisted six companies for the construction of the $1.5bn Muscat airport terminal building. The Duqm development in central-eastern Oman aims to create a new city to serve as a key administrative, industrial and commercial centre. The first phase of the Duqm project calls for the port and a dry dock expansion. Phase 2 includes an airport, an extensive road network and a free trade zone for industries. "Phase 2 will be the development of various projects whose funds will come from huge foreign and local investments," Mekki said. Mekki said oil fetched 7.75bn rials in revenue in the first eleven months of this year, according to preliminary figures, compared to 5.8bn rials in the same 11 month period in 2007. That helped drive a government budget surplus of 1.98bn rials for the first 11 months of the year, he said. "This indicates an overall healthy surplus for the overall year once the 2008 statistics have been finalised," Mekki said. This year's budget has been based on the average oil price of $45 per barrel. Source: Gulf-Daily-News