Oman: Electrical contractor shortage endangers $1B projects

Published October 18th, 2015 - 12:00 GMT

Oman is in dire need of qualified Grade A contractors to undertake vital electrical infrastructure projects worth more than RO400 million ($1.03 billion) annually, said a report, citing the Distribution Code Review Panel (DCRP).

The DCRP, which groups all of the electricity distribution companies operating in the Sultanate, has warned that the continuing dearth of capable electrical contractors could potentially hit the ongoing efforts to expand and modernise the sultanate’s electricity transmission, supply and distribution infrastructure, reported the Oman observer.

The panel is an entity operating under the law regulating the electricity and related water sector.

The DCRP lists includes Muscat Electricity Distribution Company, Rural Areas Electricity Company, Mazoon Electricity Company, Majan Electricity Company and Dhofar power Company.

It also includes representatives from the Authority for Electricity Regulation - Oman, Oman Electricity Transmission Company and Oman Power and Water Procurement Company.

Of the estimated 195 electrical contractors registered with the DCRP, only around 15 are in the Grade A category, meaning they are deemed qualified to undertake technically challenging contracts, involving notably the construction of power stations, primary substations and 132KV networks, stated DCRP chairman Hamad bin Salim Al Maghdari.

"In reality, however, only five of these contractors are “functional” and up to the task in executing Grade A category projects, revealed Al Maghdari, who is also CEO of the Rural Areas Electricity Company (Raeco).

“When you look at the (annual) budgets of the distribution companies - ranging from RO60 million ($155 million) to even RO100 million ($259 million) in the case of Reeco, it totals around RO 400-500 million ($1.03 billion to $1.29 billion) this year alone, he added.

Given these budgets, there are just not enough companies that are ready to take on the volume of contracts (linked to this capex), said Al Maghdari.

“These electrical projects are not merely about laying cables, installing building wires, and erecting electrical poles; the real challenges are in the technicalities of constructing primary substations, and so on - which requires capable and qualified contractors,” he added.

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