GROUND UP

Oman 2014 | DUQM | INTERVIEW

TBY talks to Vedat Koca, Regional Representative of STFA, on the company's current portfolio, setting up joint ventures, and the current state of the market.

Vedat Koca
BIOGRAPHY
Vedat Koca graduated from Istanbul Technical University in 1983 as a Civil Engineer, and in 1986 he obtained an MSc in Hydraulics. He joined STFA Construction Group in 1987 and has worked for several infrastructure projects in different senior positions under STFA Group. He has been Country Manager (Oman) for STFA Group since 2010. As the Country Manager, Vedat Koca has spearheaded innovation within the organization to serve the clients better, as well as to provide an enhanced workplace for all employees.

Could you tell me about the development of STFA in Oman?

We started in 2000 via a port project in Sohar. Then, we were awarded 62 kilometers of the Quriyat-Sur road poroject. Before completing that assignment, we were awarded the Duqm Port project in a joint venture with Consolidated Contractors Company (CCC). Alongside these, we were also engaged in several small projects. In 2012, we were awarded the Bidbid-Sur road development. The name of the package is 1B. Recently, we were also awarded a fishery harbor in Salalah, Taka Fishery Harbor. We engage frequently in tenders and have several in the pipeline today.

How involved has STFA been in the ongoing Duqm project, including current and future work, and what is your perspective on the importance of the development?

We have been involved in the Duqm project through the construction of Duqm Port, which is already completed. We know how the Duqm project is important for Sultanate of Oman. Therefore, we shall continue to participate in the projects to be implemented in the near future. Also, STFA Investment Holding may come to this special zone as an investor.

What is the value of your order books today?

Since we arrived, we have completed around $750 million worth of projects in Oman. This figure is the STFA share, and does not include joint ventures. Our backlog now is about $300 million with the Bidbid-Sur project and around $40 million in the Taqah project.

What attracted STFA to Oman?

Oman is an attractive, stable, safe, and secure country. Security and transparency are very important for us. You can reach any information without obstruction and you can learn what is happening very easily. You can learn how and why you lose or win jobs, and this is a huge advantage for a company. Of course, we have some problems, but the government is listening and trying to solve these problems.

How have the Omanization and minimum wage policies changed?

Today, we are required to have 30% Omanization, and we follow that rule. The important thing is that we couldn't find enough qualified people to work in our jobs. We need to improve human resources in Oman, and the companies should improve as well. That is why we are implementing courses and training for our staff. This is a universal problem across the industry. The minimum wage has risen, and we are following that. The Oman Society of Contractors (OSC) is following up on this issue and is in discussions with the Ministry of Finance to find a solution to reimburse the cost increase for the contracts that were awarded before this regulation was implemented

Are all your projects with the government?

Yes, we don't have any private projects currently. At the moment, we are providing an offer on a private mining project, and if we get it that will be the first one we have taken from a private sector establishment. We are open to anything if we trust the company. We also did one job for PDO in a joint venture with a Turkish company, Fernas Construction. It was a successful venture and is already finished.

How do you go about forging joint ventures?

We are open to all joint ventures. If you want to share our risk and combine experience, we are open to other companies. We work with CCC, and for the Bidbid-Sur road project we are in a joint venture with the Habtoor Leighton Group (HLG). It is a Dubai-based company that was originally from Australia. Risk should be shared with someone. Competition is at a reasonable, logical level currently, but it is increasing and so the situation is deteriorating. This is the result of new international companies coming in. European and Turkish companies are coming in, and the competition is getting too high, which I think will continue.

How do you find Oman's investment atmosphere as a foreign company?

We are not an investment company; we are a contractor. Our investment is only our knowledge and in-country value. We source material from Omani suppliers, and machinery from Omani traders. These kinds of things can be named as an investment. If you are coming into Oman to set up a company, it is very good. I would advise it, and I do advise people to come.