Sheikh Salim bin Ahmed Al Ghazali, Chairman, Golden Group of Companies: Interview

Interview: Sheikh Salim bin Ahmed Al Ghazali

How are labour restrictions like Omanisation requirements and visa regulations impacting the construction sector’s ability to operate and grow?

SHEIKH SALIM BIN AHMED AL GHAZALI: We are pushing the concept of Omanisation as much as we can in the private sector, but the construction sector is unique in its labour intensity. We need an Omanisation framework that can improve and develop the construction sector, not hinder the progress. We have been in dialogue with the Ministry of Manpower to improve regulations in such a way that will allow construction companies to balance Omanisation with their commitment to project delivery. It is a sector that requires two things: experience and education. We have to know the environment, the procedures, and the market inside and out; and we will fail unless we have a solid understanding of the sector. In order to achieve Omanisation in a significant way, Omanis need to upskill themselves and be willing to work with dedication. The Ministry of Manpower has made headway by starting internship and apprenticeship programmes.

As a contracting company we need to plan and match labour with projects. I wish that my entire labour force could be Omani as it is much cheaper than expatriate labour in the long run, but there is simply not enough Omani labour supply. The fact is that Omanisation cannot be achieved in the short-term and projects must continue. To make this policy a reality, companies should plan for how many Omanis they want in the field each year, thereby increasing the number of engineers, surveyors and foremen on an annual basis. Reasonable targets and plans for Omanisation are more effective than applying rigid percentage ratios.

Although the private sector fully backs the policy of Omanisation, we require government support to bridge the gap between the policy and reality. We need to increase dialogue by sitting down and discussing requirements, obstacles and plans to overcome them. If we are able to accomplish this, we will be successful in increasing knowledge transfer, accelerating development growth and providing employment for Omanis.

To what extent is growth in the construction sector dependent on government spending?

AL GHAZALI: The construction sector is extremely well organised in terms of tendering with a knowledgeable, fair and transparent tender board that has a sound system of evaluating companies and projects to find the best match and enable construction firms operating in Oman. That being rightly said, we are definitely dependent on government projects, as evidenced by current types of contracts (e.g., five big airports, roads, schools, ports). Given the country’s rapid development, I can firmly say that government spending is still driving and accelerating the sector, as seen during a single week in September 2014, when tenders worth OR350m ($906m) were opened. The tender board’s transparency and competence helps to ensure that fair and best international practices are observed. This, coupled with massive government spending, creates an encouraging environment.

Can construction materials be locally procured?

AL GHAZALI: Oman is blessed with many natural resources that our neighbours do not have, among them are copper, stone and marble. We have some resources in such abundance that we export to other markets. The government is thus encouraging Omani businesses to develop the resources for use in the construction sector, reflecting that companies will receive government assistance for producing materials relevant to the sector ranging from ready-mix concrete to light fixtures. The tender board also prefers locally procured materials for helping local businesses build their capacity, going as far as subsidising the additional cost of local products relative to import prices.

To meet this demand, many factories in Rusayl, Sohar and Salalah are expanding their operations. On the construction side too, it is much better to procure materials locally. While it will always be necessary to import certain items, as the Omani economy grows faster, the capacity to procure locally will also increase.