MUSCAT: The 2023 Report of the State Audit Institution of Oman has unveiled significant operational inefficiencies and financial mismanagement within the Oman Tourism Development Company (Omran Group), shedding light on persistent delays in key projects, challenges in securing financing, and substantial operational losses. The findings paint a concerning picture of the company’s ability to deliver on its ambitious development plans, prompting calls for strategic reforms.

A standout issue in the audit is the decade-long delay in the execution of Commercial Building No. 1 at Omran’s Business Complex. Despite the consultancy tender being issued in November 2012, the feasibility study was not finalised until January 2022, severely hampering project timelines. The project’s estimated cost stands at RO 20.4 million, yet Omran has only secured RO 11 million in bank financing. Compounding these challenges, the company has struggled to attract investors to purchase the commercial spaces, leaving a RO 9.4 million funding gap that threatens the project’s financial viability.

In response, Omran assured the State Audit that it was committed to a more rigorous adherence to the investment guidelines set forth by the Oman Investment Authority (OIA), vowing to ensure that financial approvals and backing are in place before embarking on future projects of this scale.

The report also details severe financial losses linked to a high-profile hotel under Omran’s portfolio. Following the identification of significant structural defects, Omran incurred RO 11.9 million in repair costs, of which RO 8.4 million remains unpaid by the project’s consultant. The closure of the hotel during this period also led to operational losses amounting to RO 10.5 million, further straining the company’s financial health.

In response, Omran said it had successfully recovered RO 8.2 million from the consultant and is continuing to pursue additional claims to cover the remaining costs.

The audit revealed that Omran’s failure to develop annual work plans to support its five-year strategic vision, approved in 2021, has made it difficult to assess the company’s progress and prioritise project financing. This oversight risks stalling initiatives that are collectively valued at RO 6.6 billion, with no clear framework to track performance against set goals.

In response, Omran’s Board of Directors said it has since approved an annual work plan in December 2023, aimed at ensuring that project execution aligns with strategic priorities and that adequate financial oversight is maintained.

The audit further highlighted a concerning accumulation of debt, with Omran relying on borrowings to finance projects from 2015 to June 2023, leading to a total debt burden of RO 108 million. While the company has outlined plans to reduce its debt load through anticipated returns from future investments, the scale of the challenge remains significant.

In reply, Omran said it expects to leverage its diverse investment portfolio to generate the necessary cash flow to offset debts, but the success of this strategy will be closely monitored by stakeholders.

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