Abdulla al Shidi spent 16 years in Oman's oil and gas industry before he made a career move that reflected the changing dynamics of the country's economy. "Petroleum revenues are drying up," he said. "I realised that my future was dwindling along with oil, so I made a move." Mr Shidi is now the deputy chief executive of The Wave, a development of about 4,000 high-end residences, three hotels and a golf course along 6km of the Muscat littoral.
"This," Mr Shidi said as he waved his hand across a scale model of The Wave, "is the kind of thing that will drive Oman's economy in the future." The Wave is just one of about 20 property projects underway in Muscat and the surrounding coastline. Along with opening up land for development, the Sultan of Oman, Qaboos ibn Sa'id, has outlined an ambitious plan to make Oman a high-end tourist destination and a major shipping and port location by 2020.
"People think we are slow in developing these things," said Maqbool Hamed al Saleh, the chairman of OHI Group, a conglomerate of 16 companies. "But we have just been planning for a long time. We weren't going to have people show up and not have good roads and hotels ? Our tourism will be different than some countries. We don't want hooligans." The plans for Muscat International Airport are a testament to the country's ambitious tourism plans. Its current capacity of five million passengers a year is being expanded to accommodate 48 million passengers through a US$2.5 billion (Dh91.bn) expansion project that will include new terminals, an additional runway, shopping arcades and hotels.
Mr Saleh said recent developments at his company were a good example of the changing economic environment. For years, his major revenue generators were information technology and telecommunications. Then, last week, he signed a deal with ETA Star, a developer based in Dubai, to build a series of high-rise, residential buildings on a rocky hill in an area called Burhan Heights. "Overnight, real estate became my core business," Mr Saleh said.
Abid Junaid, the executive director of ETA Star, said he was looking to expand his portfolio in Oman by acquiring more beachfront property. "We believe that today Oman and Muscat are where Dubai was four or five years ago," he said, adding that the country's freehold law and visa guarantee for buyers of property were among the clearest in the region. Perhaps most ambitious among these projects is Blue City, or Al Madina A'Zarqa in Arabic, a planned city located 45 minutes from the capital. The project will be built over more than two decades in 12 phases. When complete, the Dh73.4bn development will house 200,000 people on 32 square kilometres of land with all the components of a major metropolis, including hospitals, hotels, police stations, a shopping mall, movie theatre and golf course. Richard Russell, the chief executive of BCC1 - the company in charge of building the first phase - said that the company was in discussions with universities in the US and the UK about opening a campus at the project.
However, Blue City's first phase has already run into some obstacles along the way. An ongoing ownership dispute between the two stakeholders, Bahrain's AAJ Holding and Oman's Cyclone has caused delays, as well a complete redesign of the project last year by Foster & Partners. It has also missed its revenue targets for the past several months, leading Fitch Ratings to put the project on "ratings watch negative" for $526 million worth of debt it had raised as part of a $925m bond to finance construction. Mr Russell said Fitch was premature and the project was on track. He is boosting the labour force to 9,000 from 7,000 workers and adding a night shift to finish the project in time for the December 2012 deadline.
Mr Russell said there were discussions underway about a railway link between Sohar, Barka - where Blue City is located - and Muscat. Sohar is undergoing a major port and industrial expansion. Further expansion is underway in Duqm, where the government is building a new $200m airport and developing 21,000 hectares of land into a refinery, petrochemical complex and fisheries facilities. Ras Duqm, located 7km from the town of Duqm, will have a new port that will connect the region's refineries and industrial projects. Under the plans, the port complex will cover an area of 1.2 square kilometres and handle bulk cargo ships of up to 100,000 tonnes.
The fundamentals of the Omani property and tourism markets will be distinct in the region. Whereas the economies of Dubai and increasingly Abu Dhabi are being driven by foreign buyers and speculators, Oman's projects see about half of all sales going to nationals and the other half to a mix of Indians, GCC nationals and a small percentage of foreigners. And to nip speculation in the bud, some projects are already implementing the restrictions that Dubai's developers are only now adding to the projects. Buyers at The Wave, for instance, have to pay a total of 40 per cent of the price before they can resell.
"The most important thing to know about our economy is that we are very dedicated to protecting our heritage and culture," said Mr Saleh, of OHI. "All new buildings have to fit into the look of the country. Oman will never be like Dubai. We will never let the number of expatriates outnumber the Omanis." Despite Vogue magazine voting Oman as the number one travel destination this year, the challenge so far is letting the world know about the natural tourism draws of Oman. Most tourists end up here on chartered trips, said The Wave's Mr Shidi. The government is preparing advertising campaigns to show off the sultanate's vast mountain ranges, coastline rich with coral and other diving attractions, as well as deserts and lush green terrain in the south of the country where Indian rainstorms drift over during monsoon season.
"When we go out on road trips to sell our projects, we first talk about Oman, then we talk about Muscat, and only then, last, do we talk about our projects," Mr Shidi said. "We are not very well known in the world." bhope@thenational.ae
