Saturday 16 / November / 2024
Muscat: Government ministries and agencies will need to revise all service contracts, including cleaning company and building maintenance contracts, according to a circular issued by the Ministry of Finance.
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The circular was issued after the Ministry determined an increase had occurred in the costs of service contracts granted by ministries and government agencies between 2010 and 2016.
The circular states that as most of the service contracts are long term, the government agencies and ministries must revise all contracts to control public expenses, based upon the current financial situation.
The Ministry of Finance further stated that all government agencies and ministries should require companies to provide them with options when offering a tender.
Companies have to provide two options, a one-year and three-year contract, stating in both the total expense of these contracts.
In another circular, the Ministry of Finance has required state-owned institutions that operate with 40 per cent government funding or more, to update the ministry with financial statements, based upon the earlier circular issued by the Ministry of Finance in 2015 and 2016.
The statements include reports on the expenses of the institutions, including new projects which will be established in 2017, the total money transferred from the government to the institution from the day of its establishment, reports on finished projects since 2012, projects that will be funded by private sector companies, financial lists of incomes and expenses, salary lists and benefits granted to the CEO and his assistants, costs in dealing with the national carrier Oman Air, expected profits in 2017, details of national staffs in 2015 and 2016, vacancies for nationals, training costs and allowances.
The circular also stated that all state-owned institutions that operate with 40 per cent government funding or more, will have to provide statements in both Arabic and English languages before July 21, 2016.
In an earlier circular, the Ministry of Finance stated that expat and Omani employees working at state-owned institutions, operating with 50 per cent government funding or more, will have some benefits slashed.
Oil prices
The circular, 5/2016, signed by Darwish bin Ismail bin Ali Al Balushi, Minister Responsible for Financial Affairs, stated that the decision has been made to cushion the economy, which is struggling due to declining oil prices.
According to the decision, privileges such as health insurance for employees and families, life insurance allowances, car insurance costs for staff and family members, loans, bonuses, incentives during Ramadan or Eid, and increments not related to employee’s Key Performance Indicators (KPI), will be ended.
Additionally, allowances for school fees, mobile phones and bills, annual medical check-ups for employees and families, providing private cars for senior managers, annual leave tickets, housemaid allowances, house rentals, furniture allowances, credit cards for CEOs, hospitalisation fees and other allowances, will also be temporarily halted.
Oman has recorded a deficit of OMR1641.3 million in the first quarter of this year, compared to OMR541.6 million during the same period in 2015, due to the slide in oil prices.
With break-even crude oil prices of $75 per barrel for the 2016 budget, Oman will need to wipe out its OMR 3.5b deficit.
