Muscat: Oman’s finance ministry has begun transferring stakes it owns in listed and private companies to other state-owned corporates and sovereign funds, the country’s undersecretary of finance has said — a move that could pave the way for them to be privatised in the future.
Oman has already outlined plans to sell off state assets as it seeks to cope with a budget shortfall in the wake of lower oil prices.
The aim is to move the stakes to new owners that are more of a natural fit. The ministry’s stakes in Salalah Port Services Co, for example, were transferred earlier this month to Oman Global Logistics Group, which has interests in transport and support services.
Nasser Al Jashmi said the transfer of stakes from the government was aimed at making their operations more efficient and also to improve the management of the companies.
“We are transferring logistics-related assets, and the same applies to other sectors,” Al Jashmi said, noting sector-specific owners could manage them in a synchronised way in line with industry strategies.
Notifications to the Muscat Securities Market this week showed the Ministry of Finance transferred its stakes in Oman and Emirates Investment Holding Co and Port Services Corporation to the Oman Investment Fund. The bourse filings gave no further details.
Al Jashmi declined to elaborate on what other assets would be sold or the size of the total asset transfer plan. But he said it would be up to the new owners to evaluate the assets and restructure them if needed.
Oman has more than 60 state-owned companies, while the government also holds stakes in many listed firms.
In June, a special committee of the Shura Council for studying the effects of lower oil prices recommended the merger of government ministries to reduce unnecessary government spending.
They also recommended removal of honorary supervisory positions in government institutions.
It also called for the lifting of subsidies given to government-owned companies as well as applying zero-based budgeting, in which all expenses must be justified for each new period, and every function within the organisation is analysed for its needs and costs.
The budget for 2016 projects 3.3 billion Omani riyals (Dh31.48 billion) in deficit, which the government says it will try to reduce by improving the non-oil revenues as well as cutting expenditure. Oman posted a budget deficit of 4.5 billion riyals in 2015, as revenues declined by more than 50 per cent.
In July, the head of the special committee studying the effects of the oil price slump, resigned.
Tawfiq Al Lawati said his decision came after discussions on the committee’s recommendations were postponed until the new parliament session.
Oman’s new parliament is set to convene this month although no date has been officially announced.