China inks deal for industrial park at Oman’s Duqm port

Reuters

A group of Chinese investors have signed an agreement to build an industrial park at Oman’s southern port of Duqm in a project that could attract billions of dollars of investment, government and company officials said on Monday.
The Omani government is working to develop the area around Duqm, on a stretch of barren coast 550 km (345 miles) south of the capital Muscat, into a major business zone as part of efforts to diversify the economy beyond oil.
The industrial park deal, signed during a visit to Oman by Wang Yong, a member of China’s State Council or cabinet, could provide a big boost to that project and reduce pressure on Omani state finances, which have been hurt by low oil prices.
The industrial zone would include a refinery with a production capacity of 230,000 barrels per day, a complex for petrochemical industries, cement and automobile assembly plants, and a solar power generation facility among other investments.
By the end of last year, Chinese investments in Oman had exceeded $2 billion while trade between both countries surpassed $17.2 billion, according to the statement released at the signing ceremony in Muscat.
The sultanate derives 79 percent of its revenues from oil, of which it produces only about one million barrels per day. Gulf states have been hit hard by a cash crunch due to a sharp drop in oil prices since June 2014.
Most of them have introduced austerity measures and have decided a series of measures to boost non-oil revenues.
Yahya al-Jabri, chairman of the Omani state authority developing Duqm, predicted the 1,172-hectare industrial park would attract $10 billion of investment by 2022, including $370 million which the Chinese side would spend on infrastructure.
“The Chinese companies will be responsible for building the infrastructure, and then will be allowed to lease the land to Chinese investors. Almost all the projects will be financed by Chinese banks,” Jabri told reporters.
Ali Shah, chairman of Oman Wanfang, the Chinese-owned company that will manage investments at the industrial park, said it would include light and heavy industry as well as a $150 million, five-star hotel, a $100 million hospital and a school.
Planned investments include an oil refinery, a cement plant, a factory making pipes for the petroleum industry, an automobile assembly plant, and a 1-gigawatt solar power generation facility, officials said without naming the Chinese companies that would build the projects.
Oman Wangfang is a subsidiary of China-Arab Wanfang Investment Management Co, which was established with government backing in 2015 by companies in the northwestern Chinese region of Ningxia, according to the parent firm’s website.