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Oman 2016 | CONSTRUCTION & REAL ESTATE | FOCUS: CHALLENGES FOR OMANIZATION

The construction sector arguably faces the hardest challenge to implement Omanization, and needs as much support as it can to further the initiative.

Sectors such as banking, ICT, and tourism undoubtedly have an easier task to facilitate the employment of Omanis due to the attractive prospects available. The construction sector, however, does not have the luxury to offer comfortable office jobs, and so encouraging Omanis to participate is an unenviable task. The Ministry of Manpower and the Ministry of Commerce & Industry have recently discussed the possibilities of tweaking labor laws and Omanization ratios but companies continue to face challenges to meet national targets.

The meeting between government officials and industrialists in May 2015 highlighted some of the concerns that the industrial sector has faced, which was strongly reflected in the construction sector. His Excellency Sheikh Abdullah bin Nasser Al Bakri, the Minister of Manpower, announced that Omanization and labor laws for expatriates might be reexamined if viable alternatives were presented. He also stated that the Ministry was flexible and open to new ideas as long as “companies and factories can commit to identifying a mechanism to increase the number of Omani cadres in these institutions." His words, while positive in sentiment, barely addressed the issues faced and only vaguely promised changes. Without well-defined directives from the Ministry, many companies, especially in the construction sector will struggle to meet the guidelines.
TBY met with several companies in the construction sector to discuss this. Andy Jones, the Managing Director of international construction firm Carillion (known in Oman as Carillion Alawi) said that, “it is far more difficult to achieve Omanization for operatives." Despite regular meetings with the Ministry of Manpower, the company has only achieved around 30% so far.

Dr. Hans Erlings, CEO of Oman's largest construction company Galfar, is forthcoming on the subject; “My expectation is that it will be extremely difficult in the coming five to eight years to get the heavy civil jobs Omanized." However, he is very positive about the initiative itself, describing the objective as “excellent." He also ventures a timeframe for the proposed solution, saying that, “it will probably take a complete generation along with training from a young age and upwards to understand this concept."

His solution is particularly perceptive because it touches on the fact that it is the culture more than anything that will need to change for Omanization to take shape. The suggested timeframe is much more realistic as it allows for a more organic cultural process to take place.

This process may face its own obstacles, however. One of the major challenges is that Oman (and the rest of the Gulf) has historically not employed Omanis in the construction sector. As the labor is cheap and the work is tough, it has been much easier to employ workers from the subcontinent, especially from Kerala in South India, the people of which have historically travelled and adapted well. Omanis are now so used to the fact that people from the subcontinent will fill these roles that the idea of working in this industry is barely an option for them.

Competition has also affected local companies. International companies with a one-off contract have less pressure to employ locals due to the short-term nature of their contracts. A recent signing of six agreements worth OMR88 million with the Oman Electricity Transmission Company (OETC) highlights this. Gulf Jyoti International and Jyoti Construction, which won the second contract for the construction of a transmission line, and Energoprojekt, which was awarded the contract to act as a consultant for the design and supervision of a grid station, face far less stringent regulations than the likes of Galfar and Sarooj, two local companies to be awarded contracts.

One can understand why OETC would choose these international experts as projects of such significance need the best possible contractors. That being said, better coordination between government officials managing Omanization and government tender boards managing contracts is critical to ensure that local companies are not missing out.

It is the culture, however, that needs the most work. If Omanis continue to feel that construction work should be carried out by other people, Omanization will be difficult to achieve in this sector.