The Omani Authority For Partnership For Development Issues New Regulations
As we reported last year, the Omani Authority for Partnership for Development was established in 2014 to oversee and manage Oman's offset regime, the Partnership for Development programme.
Oman
Government, Public Sector
As we reported last year, the Omani Authority for Partnership
for Development (OAPFD) was established in 2014 to oversee and
manage Oman's offset regime, the Partnership for Development
(PFD) programme. On 3 June 2015, the OAPFD published new
regulations governing this programme.
At the heart of the PFD programme is the promotion of the social
and economic development of Oman. To this end, foreign companies
that contract with the Oman government, or with a company in which
the Oman government holds more than 50% of the shares, must invest
part of the value of that contract back into projects that will
benefit Oman. There is a strong emphasis on the need for
sustainability of such projects, so that the value they add will
continue after the foreign contractor has been discharged.
Key elements of the newly published PFD regulations:
Application |
- All contracts and subcontracts between the
government/government companies and foreign companies with a value
of more than OMR (Omani Rial) 5 million (approximately US$ 13
million)
- Also applies to: (i) a foreign contractor that receives more
than one contract in a 24-month period and the cumulative value
exceeds OMR 5 million (ii) running contracts where the total
estimated value of the entire contract exceeds OMR 5 million (iii)
single contracts with multiple suppliers of the same products or
services and the value of the imported content exceeds OMR 5
million (on a pro rata basis) (iv) all contracts with nationally
registered contractors where the value of content sourced from
outside of Oman is in excess of OMR 5 million
|
Obligation |
- The foreign contractor must contribute, in the form of one or
more PFD project(s), 50% of the value of the imported content of a
qualifying contract
- The PFD project must be completed within 8 years
|
PFD project
objectives |
- 4 key areas for development are identified: (i) Defence and
security capability (ii) Technology in certain strategic sectors,
including utilities, transport and healthcare (iii) Human resources
(iv) Private sector
|
PFD project
approval and implementation |
- The OAPFD should be engaged with from the tender process
onwards and its approval is required for all PFD projects
- The PFD Agreement (in standard form) must be signed before the
signing of the supply agreement by the foreign contractor
- The OAPFD will review the PFD project every 6 months
- There are milestones for completion within the 8-year
obligation period: 2 years (20%), 5 years (60%) and 8 years
(100%)
- Penalties are payable if these milestones aren't met
|
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