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Investments in Madayn industrial cities hit RO 6.6 billion in 2019

TAS News Service
September 12, 2020 1:57 pm

MUSCAT: The Public Establishment for Industrial Estates – Madayn is working towards developing Madayn Vision 2040 to be along the lines of Oman Vision 2040, informed 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 in order to develop and operate integrated business cities,” Al Marhoon pointed out. 

Growth

Al Marhoon informed that the gross investment volume in Madayn’s various industrial cities touched RO 6.6 billion by the end of 2019 marking a growth rate of 1.54% compared to the same period in 2018. Besides, the number of workforce at the end of 2019 reached 61,213, with an Omanisation percentage touching 34%.

The number of investing 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 utilisation rate of 52% of the total investable area. 

Al Marhoon elaborated that the growth amount in the total volume of investments in all the industrial cities during 2019 amounted to RO 101 million. Suhar Industrial City had the highest increase in total investments during 2019 compared to the other industrial cities of Madayn. “The total investments in Suhar Industrial City increased by RO 24 million, bringing the cumulative volume of the investments by the end of 2019 in Suhar to RO 2.2 billion compared to RO 2.1 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 workforce increased by 1,143 workers during 2019 compared to 2018, marking a growth rate of 2%. 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% and 28% respectively.

Al Marhoon added that 102 projects have been localised during 2019 at various stages of implementation, noting a growth rate of 4.6% compared to 2018. Of these projects, 76% are existing projects, 12% have been allocated with spaces, and 12% are under construction. These projects vary in terms of activities, as 58% are industrial projects, 20% are commercial projects, 14% are service and logistical projects, 7% are technical and 1% 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 meters, compared to 104 million square meters 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 were 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 RO 32 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 Rusayl at a cost of approximately RO 3 million. Additionally, the logistics project has been completed at Al Rusayl Industrial City at a value of more than RO 1.5 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 meters. 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 managements of the industrial cities in the various governorates full authority to approve investment applications of up to 100,000 square meters for industrial lands. In addition, the regulations set a maximum period of ten days to answer the investor regarding the investment request, and specify a period of 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 in order to ensure Madayn’s commitment to development and use of best management practices in providing services, the investment regulations include specific dates and time periods for granting approvals and licenses. The regulations clarify that lease contracts are set for investors for a period of thirty 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 in the event that 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 time 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 of time to provide service to investors and not allowing empty means of transportation to enter the industrial cities except with a permission and request from an investor working in the industrial city. The regulations also give emphasis on 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 in accordance with 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 gives emphasis on 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 a number of 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.

Entrepreneurship

“Madayn is committed to support small and medium enterprises in the Sultanate through providing support to the Omani youth to establish their own 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% 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 RO 1.1 million as a total revenue at NBC and Riyada. 

Licenses

Al Marhoon emphasised that Madayn strives to develop and deliver its services in accordance with 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 Marhoon emphasised that Madayn is focusing on developing the skills of the national manpower, which has inspired the establishment of Madayn Industrial Academy through cooperation with a number of 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.

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