Sultanate of Oman announces 2010 state budget

Growth rate expected to hit 6.1% to back march of development, construction

Economy & finance minister details budget, government’s aspirations for upgrading development march during press conference

Health, education sectors to get one billion rials for fresh development projects

The Sultanate of Oman announced the details of the State Budget for the year 2010 amidst expectation the national economy would post positive growth rates estimated at 6.1 percent with additional appropriations for a large number of sectors topped by the education and health sectors that rose to reach 1.168 billion rials.

The infrastructure development will get 16 per cent increase in the Sultanate’s budget for 2010.

Giving details of the budget, HE Ahmed Bin Abdulnabi Macki, Minister of National Economy and Deputy Chairman of Financial Affairs and Energy Resources Council, said that more emphasis would be laid on improving the existing roads, seaports and airports as well as allocating additional funds for new infrastructural projects.

The minister said that the allocation for infrastructure development would be 950 million rials.

These allocations are set to cover the spending on continuing as well as on new development projects listed in the Seventh Five Year Plan (2006-2010) in various sectors, he said.

Macki said around 30 million rials has been allocated to cover the operational expenses of new projects intended to be operated by some ministries during 2010. These projects are expected create around 4,000 job opportunities.

This is in addition to the economic growth resulting from operating such projects, in terms of increasing the private investment and the social development in the regions that host those projects.

He said that additional approbations for the road sector (1,777 million rials), including additional projects previously mentioned in our statements of previous years and the additional road projects of 2009 worth 724 million rials.

They include implementation of the first phase (Barka–Wudam Al Sahil) road and the second phase (Sohar port-Khatma Malaha) of Al Batinah coastal road spending 274 million rials, projects in wilayats in response to the Royal Directives of the 2009 Royal Tour spending 195 million rials for paving 1,256-km road.

Construction of roads and bridges of the first, second and third phases in Quriyat spending 37 million rials, construction of roads according to the master plan at Al Duqm at a cost of 43 million rials, Al Zroob-roundabout (Al Buraimi) double-carriage road (17km) - with studies and supervision spending at 23 million rials.

The construction of Arjuut-Ashkhareet-Srfiet (Dhofar Governorate) by spending 23 million rials, the dual-carriageway ring road from Arzat-roundabout to Rissaut -32km spending 20 million rials are also part of the plan.

There are additional approbations for port sector which costs 1,025 million rials for construction, development and expanding of Al Duqm Port (Al Wusta region) with an additional 788 million rials, including port expanding, marine works, construction of the dry-dock and superstructure with consultancy services and supervision, he said.

Additional approbations for the housing sector amounting to 406 million rials for construction of 2,200 houses for the project-hit of coastal road in Al Batinah.

Macki said that there were additional approbations of 882 million rials for the airports sector. An amount of 450 million rials was approved in the previous budget for the first phase of the civil works at Muscat international airport which include the runway, roads, pathways, yard and the supporting services.

The budget has also earmarked an amount of 63 million rials for leveling, setting up and construction of drainage canals to reclaim the Muscat International Airport soil. An amount of 121 million rials has been allocated for the implementation of the projects of the first package concerning the construction of four regional airports with consultancy studies for designing and supervision in Sohar, Al Duqm, Ras Al Hadd and Adam.

There are separate additional approbations for town planning and municipalities services sector.

An amount of 120 million rials has been allocated for the proposed compensation as first phase for the owners of the properties affected by the Al Batinah coastal road.

For the removal of residues, pumping water pools and opening the main and internal roads affected by the exceptional climatic conditions in Muscat, 15 million rials also been allocated.

An amount of eight million rials has been allocated to construct around 9,406 lighting poles and developing internal roads as per the 2009 Royal Tour projects. Five million rials will be spent on the construction of a fence around the Oryx protectorate and administrative control centers.

Ten million rials will be spent for reconstruction of parks and afforestation affected by the climatic conditions in Muscat.

Nine million rials have been allocated for completion of the first phase of Khasab sewerage project and 21 million rials for lighting and developing internal roads in a number of wilayats.

To support Al Hafa area (Salalah) project, 11 million rials has been earmarked. As per the budgetary allocation, 53 million rials will be spent on construction of dual-carriage roads, internal roads and bridges at Dhofar Governorate to facilitate smooth traffic.

The health and education sectors got an enhanced allocation in the Sultanate’s state general budget for 2010.

Addressing a press conference on Saturday, HE Ahmed Bin Abdulnabi Macki, Minister of National Economy and Deputy Chairman of Financial Affairs and Energy Resources Council, said that the education sector would get 10-per cent increase in the budget allocation.

He said that the health sector would be given an eight per cent increase in the budget allocation than the previous year.

The total allocation for the health and education sectors will be 1,168 million rials. This is 106 million rials more to these sectors as compared to the 2009 budget, he said.

Macki said that the current allocation for education sector is 874 million rials, which is 35 per cent of the total current expenditures of the civil ministries. This is 83 million rials more than that of the 2009 budget allocation, he said.

These appropriations are apart from the approbations allocated for this sector in the development budget estimated at around 62 million rials in 2010, he said.

Macki said that the total approbations for the new projects to be implemented during 2010 amounted to around 937 million rials so as to implement a number of development projects.

This includes construction of a number of new schools in different regions, construction of a number of new health centers at various regions. This is in addition to the implementation of a large number of service projects along with completing the ongoing projects, Macki said.

On allocation to the health sector, Macki said that the share for the sector was 294 million rials, which is 12 per cent of the total current expenditure of the civil ministries. The increase of 23 million rials in the sector will be eight per cent over the approved budget for the year 2009.

According to the minister, there are additional approbations of 247 million rials for health sector.

These include additional projects mentioned in previous year’s statements and additional projects during 2009.

Some of these projects are construction of a heart disease treatment unit at Royal Hospital at a cost of 26 million rials and the 2009-Royal Tour health projects worth 20 million rials.

The important projects on the list include the reconstruction of Saham Hospital at a cost of 10 million rials, rehabilitation of Samail Hospital spending 6 million rials, rehabilitation of Jaalan Bani Bu Hassan Hospital with an additional 5 million rials.

The maintenance and purchase of medical equipments for projects anticipated to be completed during 2010 by 6 million rials, rehabilitation of Sultan Qaboos Hospital in Salalah (the outpatient specialty clinic building) spending 3 million rials, and construction of the high-pressure oxygen unit at Khoula Hospital by 3 million rials are part of the allocation, Macki said.

The Oman Chamber of Commerce and Industry (OCCI) had approved the general budget for the 2010 fiscal year on Tuesday. The OCCI board meeting was chaired by Chairman HE Khalil Bin Abdullah Al Khonji.

Al Khonji highlighted the latest developments in the investment atmosphere that will give the private sector in Oman greater role in the economy.

He asserted the need for the private sector to assimilate the regulations and legislations which facilitate a better business environment.

The OCCI chairman lauded the active role of the private sector and appreciated its continued initiatives in issues concerning society.

The meeting discussed a number of issues, including the means to develop the chamber services and to enlist modern technologies in its operations. It also reviewed the various exhibitions and events scheduled in the forthcoming year within the Sultanate and abroad.

On December 29, 2009 experts had said that the Budget for 2010, which will be unveiled on Saturday by HE Ahmed Bin Abdulnabi Macki, Minister of National Economy & Deputy Chairman of Financial Affairs and Energy Resources Council, is likely to see a rise in expenditure and allocation for government entities.

The experts aver this could be in line with the government’s plan to meet the targets set in the current Five-Year Plan 2006-2010.

They say the global financial crisis, which forced many countries to change their budget plans, has not made the Sultanate change or cancel development plans and projects.

The experts said the outlines of the Budget announced by Macki during a meeting with Their Excellencies, the members of the Shura Council reflected the strong position of the economy, and this will encourage investors and give them trust in the strength of the economy.

The pro-growth budget will assist in creating new employment opportunities.

According to Macki’s speech at the Shura Council, total expenditure in the budget amounts to 7,180 million rials which is 573 million rials or 9 per cent higher than the budget for 2009.

Total revenue is estimated at 6,380 million rials, 14 per cent higher than 2009. This is mainly attributed to pegging oil revenue at $50 per barrel against $45 in Budget 2009. The deficit is expected to hit 800 million rials.