VZCZCXYZ0000
RR RUEHWEB

DE RUEHMS #1509/01 2951052
ZNR UUUUU ZZH
R 221052Z OCT 06
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC 7312
INFO RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MUSCAT 001509 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EB/CBA (BBEHRENS) 
COMMERCE FOR ITA (COBERG) 
 
E.O. 12958: N/A 
TAGS: ECON EINV PREL MU
SUBJECT: BIG PLANS AHEAD FOR MUSCAT'S TOURISM INDUSTRY 
 
REF: MUSCAT 1379 
 
This message contains sensitive business information.  Please 
protect accordingly. 
 
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SUMMARY 
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¶1. (U) The Ministry of Tourism and government-owned Oman 
Tourism Development Company (OTDC) are moving forward on 
ambitious plans to develop tourism-related projects in the 
Muscat metropolitan area.  The government envisions the 
construction of 16 hotels and a convention center within the 
next five years.  Opportunities for U.S. firms to participate 
in the design and construction of these facilities abound. 
End Summary. 
 
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PROJECTS ON TAP 
--------------- 
 
¶2. (U) On September 23, Econoff and POLE Assistant met with 
Mohammed al-Sinani, Director General of Planning at the 
Ministry of Tourism, to discuss the government's plans to 
develop Muscat's tourism infrastructure.  Noting the 
government's intention to boost tourism's share of the gross 
national product from 1% to 5% by 2020, Sinani remarked that 
the government was working with private developers on four 
major tourism projects in the capital area.  The first of 
these projects, the Wave, has already broken ground, with 
U.S.-based Turner Construction serving as the project 
manager.  To be completed over the next four years, the Wave 
will feature a mix of hotels, private residences, and 
commercial properties stretched along 7 kilometers of 
beachfront property.  The project will represent the first 
opportunity for non-GCC residents to purchase freehold 
property. 
 
¶3. (U) Sinani also highlighted plans to develop a three-hotel 
resort complex on Yiti beach, adjacent to the 
recently-completed Barr al-Jissah resort complex.  The $1 
billion project, complete with residential housing and a golf 
course, will break ground in 2007.  Sinani further commented 
that the government is in discussions with Egyptian company 
ORASCOM to develop a three-hotel resort complex, including a 
marina and residential units, at Sifah.  Sinani finally 
highlighted the government's intent to develop a three-hotel 
convention center complex in the Seeb district of the 
capital, where the airport is currently located.  Sinani 
stated that the government, which hopes to have the center 
completed by 2010, has selected an Australian firm to serve 
as the project's consultant. 
 
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CENTER TO COMPLEMENT DEVELOPMENT 
-------------------------------- 
 
¶4. (U) According to Sinani, the Omani government established 
the OTDC to direct the conversion of government-owned assets 
into tourism projects.  On October 15, Econoff and POLE 
Assistant met with OTDC Chief Operating Officer Tim Redman to 
discuss the company's role in developing Oman's tourism 
infrastructure.  Redman stated that the company - which will 
change its name to OMRAN ("prosperity building") once it is 
officially launched on December 17 - primarily serves as the 
government's investor in tourism projects, either as the sole 
investor in projects such as the development of a Muscat 
beachfront resort and convention center complex, or in 
partnership with the private sector, in which it takes a 30% 
stake in a silent capacity.  The company also advises private 
investors on tourism-related projects. 
 
¶5. (U) Redman noted that the company had a full plate of 
work, including monitoring the construction of 16 hotels over 
the next five years.  He commented that finding contractors, 
such as plumbers, electricians, and plasterers, to complete 
the finishing traits of the hotels would be challenging, 
given the construction boom in neighboring Dubai.  The 
company would also begin looking to associate hotel operators 
for the various projects, attempting to ensure that the right 
matches were found. 
 
¶6. (SBU) Of primary importance to the company was the mandate 
to develop a world-class convention center that would serve 
as an architectural landmark in Muscat.  The convention 
complex, set to cost between $250-$300 million, would include 
three hotels and a shopping center.  Redman expressed concern 
about constructing a "white elephant," and thus was 
evaluating ways to make it stand out from its competitors, 
such as developing a "secure" convention center and hotel 
complex that would attract high-value participants.  Redman 
further expressed concern that an architecturally-striking 
design may be difficult to achieve, given the Tender Board's 
track record of selecting the lowest-price bid, irrespective 
of aesthetic considerations. 
 
----------------------- 
JOURNEY OF LIGHT UPDATE 
----------------------- 
 
¶7. (SBU) Redman also provided an update on the proposed 
Journey of Light project (reftel).  He commented that the 
Ministry and his company were doing due diligence on the 
proposed U.S.-based investor, Frank Drohan of Contact 
Sports.net.  Under the current project proposal, Drohan would 
enter into a long-term lease with the Ministry of Tourism to 
develop a theme park complex on a parcel of beachfront 
property just north of the Wave development.  Redman remarked 
that while government officials like the concept, they 
question whether the assumptions provided by Drohan in terms 
of gate receipts and hotel rack rates would support the 
investment.  Redman also pointed to the low share price of 
Drohan's company and his recent business dealings with the 
Qataris, who bought him out of an investment for $1 million, 
as potential concerns. 
 
--------------------------------- 
OPPORTUNITIES FOR U.S. BUSINESSES 
--------------------------------- 
 
¶8. (U) Comment.  The upcoming push by the Omani government to 
fully develop Muscat as a business/leisure destination 
presents ample opportunities for U.S. companies.  Redman 
noted his hope that U.S. firms would participate in the 
competition for designing a secure convention center facility 
and constructing the proposed hotel complexes.  Redman also 
expressed interest in meeting with U.S. hotel operators to 
gain a better feel for how they could participate in the 
management of the proposed properties.  End Comment. 
FONTENEAU