Muscat, Yahya bin Said al-Jabri, Chairman of the Special Economic Zone Authority in Duqm (SEZAD) said that attracting foreign direct investment (FDI) to the Sultanate in general, and SEZD in particular, is based primarily on the good diplomatic relations of the Sultanate with many countries, both bilaterally and multilaterally.
In an interview with Shurufat Almajlis magazine, issued by the State Council, he explained that this matter was obvious during the promotion campaigns carried out by SEZAD in many countries, including the People's Republic of China, South Korea, India, the United States of America, Russia, Brazil, Belgium, France, Britain, and other EU countries. "We have seen this in the care that we have received in those countries during the bilateral meetings and seminars held with representatives of trade bodies and businessmen to foster the trade and investment cooperation," he added.
He affirmed that this is a result of the approach established by the late Sultan Qaboos Bin Said Bin Taimour and his rational policy in building the state and its modern institutions, moving it forward in all social, economic and cultural aspects and linking it with the international community based on mutual respect and promotion of regional and international peace and security.
As for the achievements made so far regarding the overall operational activities in SEZD, al-Jabri said "Each phase has its own indicators of achievement. SEZAD is about to celebrate its eighth anniversary with many achievements. It is worth mentioning that SEZAD was established in 2011 based on the concept of Greenfield that should have the needed infrastructure and the economic and commercial activities that are significantly impacting the macroeconomic. Today, we can say that the overall system of public facilities and infrastructure has been mostly completed, including various port facilities such as a commercial quay, an oil quay, control gates, storage and handling yards, administrative buildings, drydock facilities, airport facilities, natural gas pipeline from Saih Nihayda to Duqm, main road networks, power and water production and distribution networks, surface water and flood management system, environmental facilities for the safe disposal of hazardous and non-hazardous household and industrial waste and a fishing port with a fishery complex. The Authority has also completed the legislative and institutional system for the management, regulation and control of economic activity in SEZD. A number of investment projects have been localized through the private sector or through a partnership between the public and private sectors. These projects include the development of infrastructure for two industrial cities by Oman Wanfang Company and Duqm Industrial Land, as well as a number of real estate and tourism development projects such as the Labor City Project, the Duqm Waterfront Project, the Little India Project, a number of hotels and commercial, residential and office complexes. The construction of the Duqm Refinery and the Crude Oil Storage Plant in Ras Markaz has already started, in addition to a number of industrial projects in the field of thermoplastic piping industry, food and fish industries and chemical and cement industries.
As SEZD is gradually developed, we can see that all of the projects mentioned, whether the public facilities, infrastructure or investment projects, motivate the localization of new investment projects in tourism development, logistics, petrochemicals and industries based on minerals found around Al Wusta Governorate".
SEZAD Chairman elaborated on the investment incentives dedicated for the investors and his future vision of SEZD's long-term investments. He said that SEZD provides investment incentives for investment projects to increase its competitiveness with other investment destinations in the region and in the Arab World, and to maximize the economic feasibility of these projects.
"Oman enjoys a number of competitive advantages such as the political stability, the stable macroeconomic system, the strategic location along the Arabian Sea, the availability of modern public facilities such as a port, an airport and a road network, advanced infrastructure services such as electricity and water, a safe natural gas supply and reliable regulatory environment that is transparent and easy to access by both local and foreign investors. All of these features are important elements in driving the region's economy through promising targeted sectors including oil refining, petrochemical industries, raw materials industries, food and fisheries industries, transport and logistics services related to crude oil storage and transit trade, and tourism and real estate development projects. SEZD Master Plan is made to draw the future of the economic zone for the next two decades, so that Duqm becomes a main hub at the national level, an important station for multimodal transport and logistics services, an integrated industrial complex with high added value to the national economy, and a tourist destination along the Arabian Sea," he furthered.
As for the overall manufacturing industries that will be set up in SEZD in the long run, al-Jabri explained "If the Duqm Refinery project is considered as an industrial project, in addition to the lands allocated for the Sino-Oman Industrial City project being developed and managed by Wanfang Oman, and lands for the Industrial City being developed and managed by Duqm Industrial Land Company, then the industrial sector has the highest percentage of the total land lots contracted and granted as usufruct rights.
As for what has been said that the government is the most prominent investor in the industrial sector, I can say the following: If we consider that Oman Oil Company's (OOC) projects that are carried out directly, through subcontractors, or through strategic partnerships, such as the Duqm Refinery project, which is implemented through an alliance between OOC and Kuwait Petroleum Corporation (KPC), the crude oil storage plant project in Ras Markaz, or the petrochemical complex, then we can say that the government is the leading investor in the industrial sector in SEZD at this stage.
With regard to national capacities, I would like to point out that one of the main objectives of SEZD is to build and develop Omani capabilities, transfer and localize the knowledge needed for projects, accumulate experiences and skills acquired at the national level, and find the elements of sustainability and continuity of projects that are localized in SEZD".
SEZAD Chairman pointed out that the entity responsible for determining the Omanisation rates in the Economic Zone, according to the law, is the Board of Directors of SEZAD. The subsequent monitoring of projects to ensure adherence to the prescribed rate is carried out by the Ministry of Manpower and SEZAD. There are tremendous efforts exerted to ensure that the national workforce is gradually replacing the foreign workforce as part of corporate social responsibility towards the local community. However, we find out that many of the Omani job seekers refuse to work in Duqm for different reasons such as the availability of technical and specialized opportunities in all governorates of the Sultanate, as well as the tendency of job seekers to find opportunities that match their aspirations and academic qualifications.
He talked about Duqm Refinery as the largest in terms of capital investment in the region. He said that it is also the largest private funded project in the Sultanate. The first phase of the investment program includes the construction of the Duqm Refinery and Petrochemical Industries Company, while the second phase includes the establishment of a petrochemical complex, which will be built in the next few years. The refinery project will be the base for many other projects in the field of electricity generation and water desalination, handling, storage and transport of crude oil and its derivatives, in addition to a number of industrial projects and specialized professional services related to the upstream and downstream of the Refinery. Thus, the Duqm Refinery Project is a key pillar in transforming the Economic Zone into a vital hub for energy and oil industries across the Sultanate and the region.
As for the SMEs in SEZAD, al-Jabri explained "We are taking a great care of SMEs, whether by SEZAD or by other entities carrying out the vital projects in the Economic Zone, such as the Port, the Drydock, the Duqm Refinery or the companies operating and managing the industrial zones. This care is translated in organizing training programs and offering scholarships to the local community to obtain university degrees in specific disciplines required by the Economic Zone.
In October 2018, the Tawasul Social Responsibility Fund was launched in partnership with a number of institutions operating in the Economic Zone. There are also the In-Country Value programs (ICV) adopted by the private sector. Another advantage for the SMEs is that they are given preference in the tendering process to maximize their opportunities. The total number of SMEs registered in the Economic Zone is 698 SMEs; all are certified by the Public Authority for Small and Medium Enterprises Development (Riyada). SEZAD, through an advanced audit program, monitors all the amounts spent on the works carried out by SMEs from the total expenses of each project (10%).
The social responsibility program, implemented by SEZAD in cooperation with companies operating in the Economic Zone since its establishment in 2011, includes many other programs. The educational program, for example, funded (28) internal bachelor's scholarships in private universities and colleges in the Sultanate. SEZAD, in cooperation with the Chinese company Wanfang sent (67) students to study at Ningxia Polytechnic College in Yinchuan, China. The first batch graduated last year, while the second batch began studying this year.
A number of events were supported by SEZAD in schools in Duqm such as celebrating Teachers' Day and honouring outstanding students. In 2016, 44 students graduated from the Duqm Training Initiative, which lasted for 6 months. A number of trainees were employed in companies operating in SEZD. In 2018, interviews were carried out for training and job opportunities, during which 283 opportunities were offered. Of these, 130 opportunities training for employment, while in 2019, we trained 200 job seekers.
Overall, total expenditure on social responsibility programs in Duqm was about RO 700,000 by the middle of this year".
SEZAD Chairman explained that the drydock facility is a model for the integration of industrial activities in the region. The maintenance and repair activities carried out in the drydock include making the engineering designs, installations, coatings, sheet metal and pipe manufacturing, shearing, welding, sandblasting and repairing of electrical equipment.
He pointed out that Oman Drydock is currently equipped with all the necessary means and technical skills to carry out these activities with highest quality and financial and technical efficiency, enabling it to expand the scope of its services apart from the maintenance and repair services. The operations in the drydock include the manufacturing of metal structures and platforms and the provision of specialized services needed by the Duqm Port, Duqm Refinery and oil and gas exploration and recovery companies operating in offshore or in the desert in Al Wusta Governorate.
As for the Sino-Oman Industrial City, al-Jabri explained "SEZD has adopted the concept of "master developer" in order to develop investment sites, provide infrastructure services, and structure investment opportunities to market them in the countries that can be a source of foreign direct investment for the Sultanate and promising export markets for its products.
SEZD has attracted Wanfang Oman Company to develop and manage the Sino-Oman Industrial City. As a first stage, the company developed the infrastructure and prepared the investment sites. The company, through its network in China, will attract a number of industrial projects either as operating companies or sub-developers within the city.
SEZAD also gives a license to the Duqm Industrial Land Company (DILC), an investment alliance between Duqm Port Company and foreign partners from the Kingdom of Belgium, to develop and manage an industrial city that localizes foreign and direct foreign investment from the Sultanate, neighbouring countries and the European Union. This company aims at marketing the Omani industrial products to the local market, as well as the regional and international export markets that have good trade relations with the Sultanate.
These two Industrial Cities provide the Economic Zone with the developed lands it needs over the next two decades. They offer diversified investment products in the industrial sector, as well as accessing multiple funding sources and promising export markets.
The Little India project is an integrated tourism complex project, not an industrial one, that will be developed in phases within the concept of 'master developer'. The project includes a five-star hotel, a yacht marina, diverse residential complexes, commercial complexes, a bilingual school and a number of recreational facilities according to the investor's plan".
"The demand for lands by the industrial projects can be fully and effectively met through the two industrial cities established in the Economic Zone. In addition, SEZAD can grant usufruct rights for lands located in the Economic Zone directly to large industrial projects, such as the petrochemical complex to be established by the Duqm Refinery and Petrochemical Industries Company on a site adjacent to the current refinery site. This project will be contracted directly by SEZAD. There is also a complex for food and fisheries industries linked to the fishing port, which will provide the investment sites needed for industrial projects based on fishing and aquaculture.
As for the achievement of the Sino-Oman Industrial City, Wanfang Oman has developed the infrastructure networks, including roads, water and electricity distribution networks and rainwater drainage systems. The company is currently establishing a logistics distribution centre for the building and construction materials. Another project for the manufacture of plastic thermal pipes, which will be used in the oil and gas sector, started through a Chinese-Omani investment alliance called Duqm Hongtong Pipes Company. The development plan of the Chinese city will be implemented over the coming years in accordance with the signed development agreement," he furthered.
Al-Jabri pointed out that many investment projects in the Economic Zone are under construction and have not yet entered the operational phase. Therefore, the number of direct and permanent jobs created in the Economic Zone since its establishment in 2011 is about 3000 jobs. The rate of Omanisation on average is about 14%. The new projects in the Economic Zone are expected to create around 1,300 jobs for Omanis by 2020; the job opportunities will increase over the next three years as the projects start their operations, as well as having more new investments.
As for the balance between the sustainable development and protecting the environment, he said "There was previously a conflict between industrial development and the requirements of environmental protection and conservation of natural resources. However, due to the public awareness and interest in the development of industrial technology during the past decades, it becomes possible to strike this balance between development and environmental protection, using the new concepts established at the global level such as "sustainable development", "best industry practices" and "best available technology".
SEZAD has accorded high attention to protecting the environment from pollution and ensuring the optimal use of natural resources. This was done by conducting the necessary environmental studies in order to develop a comprehensive plan for the Economic Zone and land plans. There have been separate areas for the urban, tourist and industrial uses, as well as creating green areas and natural corridors to separate the different development areas. We have also taken into account the wind movement to ensure high quality of air in residential and tourist areas. A 300 m lift untouched in the beaches to preserve the marine environment.
In addition, the Economic Zone's legislation has entrusted SEZAD with the enforcement of the Law on Environmental Protection and Pollution Control. SEZAD has issued the executive regulations that ensure the effective and efficient application of the law. These efforts include the design of environmental impact studies at an early stage in conjunction with the design of the technical studies for investment projects. On the basis of these studies, the environmental requirements, that the project must comply with in the stage of design, construction and operation, are imposed. A specialized department has been established and provided with the expertise and technical cadres necessary to manage and control the environmental affairs. The Department is currently designing a comprehensive environmental strategy for the Economic Zone in light of the results of the environmental studies conducted in the Zone.
On the other hand, the environmental facilities are currently available in the Economic Zone for safe handling of all types of waste generated in the Zone, including an environmental landfill for domestic waste, an integrated waste facility for non-hazardous industrial waste, a terminal for waste oils generated from vessels arriving at the Port and Drydock, and an incinerator for disposal of hazardous industrial waste.
Finally, we are trying to reduce the consumption of the natural resources need by these activities through supplying the Economic Zone with natural gas used in power plants and heavy industries, which is a source of clean energy".
Al-jabri pointed out that Several initiatives have been undertaken in this area and others are underway to make Duqm a Smart City. This includes the establishment of a 260 km fibre optic networks by Oman Broadband Company, Omantel and Ooredoo and the establishment of a data centre and cloud services by Oman Data Park. The Port Community System (PCS) is being developed by the Port of Duqm Company in coordination with Oman Global Logistics Group (ASYAD). This System is a neutral and open electronic platform that enables the intelligent and secure exchange of information between public and private stakeholders, including shipping companies, land transport companies, port operators, freight forwarding and customs clearance agents, port and customs authorities, other relevant regulatory stakeholders, importers and exporters.
He added that SEZAD has developed a Geographic Information System (GIS) in the Economic Zone for the digitization, archiving and analysis of all geographic information, including regulatory schemes, development sites, and infrastructure such as roads, electricity, water, communications and rainwater drainage systems. SEZAD has designed smart phone applications to activate its communication with the citizens and visitors, including providing information on government and tourism services provided in the Economic Zone, as well as reporting incidents and emergencies, and sending warnings.
SEZAD Chairman highlighted the partnership between SEZAD and Oman Chairman of Commerce and Industry (OCCI). He said "OCCI is a real partner of SEZAD in reaching the local investors, introducing the investment opportunities in the Economic Zone and stimulating the Omani private sector to take advantage of these opportunities. The Chamber will also be a partner, at a later stage, in identifying the challenges faced by the industrial sector in accessing foreign export markets, as well as helping us to create the necessary business partnerships.
My message to the Omani private sector: The Duqm Special Economic Zone is moving towards a bright future. During the past decade, the government, under the wise leadership of His Majesty Sultan Qaboos bin Said, has established all the pillars and means to make the Economic Zone a distinct investment destination and a sophisticated business environment at the national, regional and global levels. We call the private sector of Oman to invest in the Economic Zone and be an active partner in this blessed national project".
Source: Oman News Agency