MUSCAT – These include unchecked contract extensions, significant cost overestimations leading to millions in lost savings, uncollected fines for project delays, and a breach of local currency regulations.
The findings, released following a comprehensive audit, have prompted the referral of several company employees to the Public Prosecution for further legal action. The Company, in turn, has taken action, to rectify the status.
Key violations identified:

1. Increase of actual contract value of 14 out of 40 contracts in the Production Chemistry Department, compared to their approved contract value for the period (2013 – 2030), with differences ranged from 35 percent to 718 percent, due to repeated extensions of contract period and post-award scope increase, without floating a public tender to explore competitive prices.
2. Setting volume discount rates on purchases in certain contracts lower than applicable rates in other contracts, which reach up to 5 percent, resulted in non-realization of savings of about USD 3.3 million during the period between 2013 – 2023.
3. Award of 16 contracts valuing USD 200 million to local contractors using a currency other than Omani Riyal during the period 2021 – 2023, in violation of the circular of the Ministry of Energy and Minerals stipulating the use of Omani Riyal currency in transactions with local contractors.
4. Overestimation of Target Procurement Cost for Marmul Polymer Project – phase 3 by about USD 173 million, compared to the actual cost of about USD 125 million, resulted in the contractor receiving a gain share of about USD 10 million from the savings realized between the estimated and actual amount. In addition, absence of a contractual provision to hold the contractor accountable for his low performance.
5. Project delivery delays of up to 309 days were recorded, yet the company failed to collect approximately $5.7 million in contractual penalties from the responsible parties.
6. An $8.7 million power plant project was directly awarded to a contractor with poor financial standing, resulting in a two-year delay in project implementation and raising questions about due diligence.
7. Substantial lapses in the oversight of facility management contracts, including:
   • Disbursement of RO 1.3 million in performance bonuses despite contractual violations
   • Payment of RO 2.3 million in unjustified profit margins
   • Lack of verification for RO 27.8 million in reported wage costs
8. Allowing the contractor to commence works valuing about RO 1.2 million without obtaining the necessary approvals for the requests to amend the approved budget. Additionally, actual expenditures exceeded the approved budget for projects by RO 17.2 million, representing 64%, for the period (2020-2023).
   In view of the violations identified in the contract, the Authority has referred a number of employees to the Public Prosecution to initiate legal actions against them.