Investment in Madayn industrial cities top OMR6.6 billion in 2019

Business Saturday 12/September/2020 13:28 PM
By: Times News Service
Investment in Madayn industrial cities top OMR6.6 billion in 2019

Muscat: The total investment in Madayn’s various industrial cities touched OMR6.6 billion by the end of 2019 marking a growth rate of 1.54 per cent compared to the same period in 2018, according to a senior official of the Public Establishment for Industrial Estates (Madayn).
Besides, the number of the workforce at the end of 2019 reached 61,213, with an Omanisation percentage touching 34 per cent.
The number of investment projects in the industrial cities reached 2,313 projects at the end of 2019, of which 1,759 are existing projects, 285 are under construction and 269 projects have been allocated with spaces. Moreover, the total area of Madayn’s industrial cities reached 114,306,724 square meters by the end of 2019 with a utilisation rate of 52 per cent of the total investable area, said Hasan bin Marhoon Al Marhoon, Director General of Planning and Business Development at Madayn.
“Through the development of Madayn Vision 2040, we aim at establishing world-class business cities while maintaining the Omani identity. Madayn aims at emphasising its role in promoting comprehensive and sustainable economic and social development through enhancing public-private partnership to develop and operate integrated business cities,” Al Marhoon pointed out.
Al Marhoon elaborated that the growth amount in the total volume of investments in all the industrial cities during 2019 amounted to OMR101 million. Sohar Industrial City had the highest increase in total investments during 2019 compared to the other industrial cities ofMadayn. “The total investments in Sohar Industrial City increased by OMR24 million, bringing the cumulative volume of the investments by the end of 2019 in Suharto OMR2.2 billion compared to OMR2.1 million at the end of 2018. This increase is attributed to the investments of companies that were introduced in Suhar Industrial City during 2019,” he said.
The number of workforces increased by 1,143 workers during 2019 compared to 2018, marking a growth rate of 2 per cent. Al Rusayl and Suhar Industrial Cities account for nearly two-thirds of the total workforce within Madayn’s industrial cities. The percentage of the workforce in the two industrial cities is 35 per cent and 28 per cent respectively.
Al Marhoon added that 102 projects have been localised during 2019 at various stages of implementation, noting a growth rate of 4.6 per cent compared to 2018. Of these projects, 76 per cent are existing projects, 12% have been allocated with spaces, and 12 per cent are under construction. These projects vary in terms of activities, as 58 per cent are industrial projects, 20 per cent are commercial projects, 14 per cent are service and logistical projects, 7 per cent are technical and 1 per cent are housing and real estate projects.
Additionally, Al Buraimi Industrial City topped the other industrial cities in terms of the total number of projects. By the end of 2019, the number of projects in Al Buraimi Industrial City touched 508 and is followed by Suhar Industrial City with 416 projects.
In 2019, around 9.7 million square meters were added as an expansion to Madayn’s gross area. With this expansion, Madayn’s total area reached nearly 114 million square metres, compared to 104 million square metres at the end of 2018.
Al Marhoon explained that the year 2019 witnessed the implementation of Madayn’s approach of public-private partnership as the management and operation of Al Rusayl Industrial City was transferred to Oman Investment and Development Holding Company (Mubadrah). With this approach, the development of infrastructure and superstructure in the industrial city has accelerated as phase (2A) was launched at a cost exceeding OMR32 million, as well as the redevelopment and rehabilitation project of the entrances to Al Rusayl Industrial City and the introduction of new entrances to be in line with the business growth and demand at Al Rusaylat a cost of approximately OMR3 million. Additionally, the logistics project has been completed at Al Rusayl Industrial City at a value of more than OMR.5 million. Moreover, the company has begun preparing technical and consulting studies for the development of phase (2B) and rehabilitation of the entire old area, which extends to nearly 5 million square metres. Al Marhoon emphasised that by the end of the current year, the experience of privatising Al Rusayl Industrial City will be evaluated from all aspects.
Investment regulations
Al Marhoon affirmed that Decision No. 169/2020 issued in May this year, which amended some provisions of the investment regulations in Madayn’s industrial cities, has granted more powers to Madayn and more advantages and incentives to the investment environment in the industrial cities. This amendment will undoubtedly contribute to localising more local and foreign investments in the various industrial cities, says Al Marhoon.
The investment regulations play a key role in setting rules, procedures and legislative frameworks to organise the process of attracting local and international industrial developers to invest in building, managing and operating specialised investment cities; determining the period of usufruct contracts and investment agreements for developers to be 99 years according to the project; and opening the way to attract global and regional experiences and expertise in the field of building, managing and operating economic cities, and organising the contracting with them according to management and operation agreements of up to 25 years.
The regulations also grant the management of the industrial cities in the various governorates full authority to approve investment applications of up to 100,000 square meters for industrial lands. Besides, the regulations set a maximum period of ten days to answer the investor regarding the investment request and specify 30 days from the date of approval of the investment application to sign contracts and complete investment procedures in Madayn’s various industrial cities.
The investment regulations link the practice of investment activities in the industrial cities with activity license that is renewed annually, and this shall not be granted or renewed except to investors who meet the conditions specified in the law. One of the major conditions is achieving the Omanisation rate in the projects. The rights of investors and obligations are clearly defined and so are Madayn’s obligations towards investors. Moreover, the cancellation or suspension of the license is only made in specific and restricted cases in a manner that guarantees the interests of investors and does not threaten their investment activities.
Al Marhoon added that to ensure Madayn’s commitment to development and use of best management practices in providing services, the investment regulations include specific dates and periods for granting approvals and licenses. The regulations clarify that lease contracts are set for investors for 30 years, renewable for a similar period, and restrictions have been put in place for subletting and not allowing except the license holder to engage in any activity inside the industrial cities to limit shadow investment and not perform any activities that conflict with applicable laws and regulations.
The regulations also include clear procedures for handling the status of buildings and facilities set up by investors and developers upon the expiry of contracts and in a manner that guarantees their rights and those of others. Furthermore, the regulations allow investors and developers if their projects falter and cannot continue under exceptional circumstances to sell buildings and establishments built on the leased lands according to specific procedures, provided that selling is to investors who are authorised to engage in the same specific activities according to the uses of lands and facilities.
The investment regulations also organise the work of contractors and suppliers within the industrial cities and control their relationship with investors in a manner that guarantees the rights of investors and their rights, as the regulations set clear restrictions and requirements for building and construction in these industrial cities and determine the response period by the relevant authorities with specific periods. The issue of buildings, equipment and goods remaining on land shall be resolved upon the expiry of contracts for any reason, by placing restrictions on selling by public auction and specifying all related aspects.
Besides, the regulations play an important role in setting the relationship between investors, cargo transport companies and transportation intermediaries, with specifying periods to provide service to investors and not allowing empty means of transportation to enter the industrial cities except with permission and request from an investor working in the industrial city. The regulations also emphasise the employee’s relationship with investors, ensuring their rights and those of investors, while setting restrictions and requirements for the workers’ housing and ensuring the provision of humanitarian requirements following the best standards and relevant conditions.
The regulations set strict restrictions regarding insurance on establishments, buildings, property and utilities in a manner that achieves the highest levels of maintenance. To work according to the best standards of transparency and clarity with the investors, a list of violations has been developed indicating the value of the violation and the clear and defined measures to be taken with an illustration of a table showing the possible violations.
Facility buildings
Al Marhoon stated that Madayn emphasises expanding commercial services in the industrial cities to meet the needs of investors and visitors. These projects are part of Madayn’s ongoing efforts to provide value-added projects in its industrial cities. These buildings offer various facilities and services such as banking services, travel agency, cafes, consumer stores, as well as a range of local and international restaurants, and plenty of office spaces for government and private bodies and companies.
Al Marhoon informed that Madayn has concluded contracts with several entities to achieve its plan to provide the needs of industrial cities to the highest standards. These contracts are related to projects of establishing facility buildings in Nizwa Industrial City, Al Mazunah Free Zone, Suhar Industrial City, Al Rusayl Industrial City, and Samail Industrial City.
“Madayn is committed to supporting small and medium enterprises in the Sultanate through providing support to the Omani youth to establish their businesses by allocating the necessary spaces at a dedicated and integrated incubator that provides an ideal environment for the start-ups,” Al Marhoon pointed out. The support includes guidance, consultancy and training in entrepreneurship and marketing for those companies, as well as integrated technical and logistics support. Madayn is also committed to implement the decision of allocating 10 per cent of the total value of purchases and tenders to small and medium enterprises and grant them the priority, especially the enterprises incubated at the National Business Centre (NBC). Al Marhoon added that the incubated companies achieved OMR1.1 million as a total revenue at NBC and Riyada.
Al Marhoon emphasised that Madayn strives to develop and deliver its services following the requirements of investors, and has flexibility in dealing to help reduce time and efforts of investors, beneficiaries and Madayn employees alike. In 2019, the number of approved industrial plans touched 135, the number of approved building permits reached 191, and the number of approved business permits amounted to 2,556. Moreover, the number of licenses approved in 2019 reached 1,045; of which, 601 licenses for industrial activities, 301 licenses for commercial activities, 93 licenses for service activities, 43 licenses for logistical activities,5 licenses for residential and real estate activities, and 2 licenses for other activities.
Madayn Industrial Academy
Al Marhoonemphasised that Madayn is focusing on developing the skills of the national manpower, which has inspired the establishment of Madayn Industrial Academy through cooperation with several partners. The academy aims at empowering national talents through providing professional and technical training programmes to train and develop Madayn’s employees as well as the Omani workforce to raise their productivity and readiness to join the labour market. This academy comes in continuation of Madayn’s training programmes since 2011 for the national cadres working in factories and companies based in the various industrial cities. The academy is developing its annual plan by focusing on developing and training the national cadres in Madayn, the companies and factories based in the industrial cities, Knowledge Oasis Muscat and Al Mazunah Free Zone. The academy also carries out studies, consultations and research to enhance the industry, technology and human cadres in the industrial cities, Knowledge Oasis Muscat, and Al Mazunah Free Zone. Madayn Industrial Academy also supports the directorates and departments of Madayn to achieve the optimal utilisation of national human resources and financial and material resources.