Sunday, March 23, 2008

Where did the traffic go?

According to an article published by Times of Oman, passenger traffic at Muscat International Airport saw a sharp decline towards the end of Feb-08 compared to the same period last year...

According to the article, "traffic fell by 23.9 per cent to 617,791 at the end of February 2008 against 812,600 passengers during the corresponding period in 2007,

The number of arriving passengers fell by 20.8 per cent...

The number of departing passengers via Muscat International Airport fell by 24.1 per cent "

Click here to read the full text.

The reasons cited by the article include withdrawal of Gulf Air and some airlines ceasing service to MCT.

Saturday, March 15, 2008

Muscat Hils, Golf Country Club!!

So the projects name is changed but why the hell is called in Arabic Muscat Hills instead of beng called 'Tilal Muscat' we are in Oman and names should be in Arabic....... westren names are not for us... this is really pissing me off

Thursday, March 6, 2008

Another rant about inflation (or controlling the juggernaut)...and my own observations

Another one added to the tally of a bajillion articles on inflation and what the government is doing to combat it was published in the Times of Oman recently...Click here to read it (it's a bit long).

Apparently the import of fish has been allowed, which will somehow drive down inflation. (It should drive down prices of fish and seafood, provided the imports are comparable in price to local produce. That aside, it should also calm the markets by balancing out supply/demand to an extent).

In my observation over the last year or so, I have noticed that inflation in Oman is not necessarily due to supply/ is due to excessive liquidity in the market. This is due to the GCC states (except Kuwait) having to shadow US Monetary policy...while the US Federal reserve has cut interest rates form 5.25% to 3% from september onwards trying to ward of recession, the GCC countries are riding on a growth spurt fuelled by oil prices smashing new records everyday. This is practically a case of two economies moving in opposite directions but following the same policies.

This disparity in economic policies has driven up inflation in several ways...on one hand it creates a situation where a rapidly expanding economy meets excessive liquidity, excess money supply and low interest rates...when these combine together, it can drive up inflation very quickly...

Secondly, due to the OMR being pegged with the USD (at 1 USD = 0.385 OMR) and Oman shadowing the US economic policies, the value of the OMR has been dragged down to record lows against the major currencies...I'll cite a few examples:

Currency, Value in OMR 15-Dec 2006 , Value in OMR at 6-Mar-2008, % change from 2006 value

AUD OMR 0.300 OMR 0.360 (up 20%)
CAD OMR 0.332 OMR 0.390 (up 17.4%) [1]
EUR OMR 0.504 OMR 0.584 (up 15.8%)
GBP OMR 0.752 OMR 0.770 (up 2.4%)
JPY* 306.04 268.53 (up 14%) [2]
SGD OMR 0.250 OMR 0.277 (up 10.8%)
NZD OMR 0.266 OMR 0.307 (up 15.4%) [3]
CHF OMR 0.315 OMR 0.373 (up 18.41%)

[1] Canadian dollar attained parity with the USD in early November 2007, peaking at OMR 0.410
[2] The rate against JPY is expressed as OMR 1 to JPY/. Other currencies are 1 unit of foreign currency to OMR
[3] NZD value was reduced by some amount after intervention by RBNZ

(All rates sourced from HERE)

As it is clearly visible, the OMR has lost significantly to all major currencies except the UK Sterling. This means that all imports (be it shoes from European brands, your favourite meats from AUS/NZ, and the Cars from Toyota APAC which is based in Australia and manufactures most of the Camry units for the GCC region) have become significantly more expensive.

A an example,If you were paying OMR 3 per kilo for a A$10/kilo meat from Australia, you'll simply have to pay OMR 3.6 per kilo for the same product...

Not only has this depreciation of the OMR hurt the consumer in Oman, it has also reduced the attractiveness of the GCC region to expatriates, particularly from South Asia. On top of the spiralling cost of living, leaving less money with people to remit back home ( a large chunk of south asians do that), the depreciating currency creates further hindrance. As another example, 1 OMR was equal to almost 120 INR (Indian rupees) in dec 2006...and the current value stands at 1 OMR equaling almost 102 INR. This change of 17% in currency rates, coupled with the rapidly growing economies in South Asia (particularly India) where salaries are on an upward trend, will make it all the more difficult to attract talented people from the region. (The sporadic protests by construction workers over wages is another indication).

Looking at the data, isn't it getting obvious that if not detachment from the USD, a revaluation of the OMR makes sense? It will make imports cheaper and reduce the "imported inflation" in food items...As such, there is nothing stopping the Central bank from revaluing later should the USD appreciate again...but for the short-term, another US interest rate cut of 75 basis points (0.75%) from 3% to 2.25% is expected soon... will definitely pinch the USD even more...

Tuesday, March 4, 2008

Good news: Darsait roundabout will be a signalised junction soon

MUSCAT -- Muscat Municipality is embarking on another phase of improvements to the city's road network, aimed at easing traffic flows, eliminating bottlenecks, and strengthening sections of the network that were damaged during last June's unusual weather conditions. The latest initiatives are targeted at improving the road network in Darsait, Qurum, Ghala and Seeb, among other areas of Muscat Governorate. In the biggest of these projects, Muscat Municipality will undertake a series of upgrades to the road network in the Darsait area at a total cost of around RO 2.9 million.

The improvements will help address perennial peak-hour congestion at the Bait Al Falaj (Darsait) roundabout, as well as streamline traffic flows into the surrounding residential neighbourhoods. Besides converting the Bait al Falaj (Darsait) roundabout into a signalised junction, Muscat Municipality is also constructing a new link road connecting the Qurum-Darsait carriageway to the Darsait road network. Consequently, vehicles bound for Darsait will no longer have to approach the soon-to-be signalised Darsait junction, but can instead use the new link road to directly gain access into Darsait.

The link road will start from near the popular picnic area adjoining the southbound section of the carriageway, and will feed into the Darsait road network. Additionally, a new service road will be constructed from the small roundabout at the entrance to Muscat Municipality in Darsait, and will lead up towards Pakistan School Muscat. The new road will help feed traffic into the Ruwi Church/Darsait Temple area, thereby easing the flow along the Darsait road. The Al Burj roundabout near Ruwi Church will also be converted into a signalised junction as part of the road improvements in the area.

Well-known construction firm Consolidated Contractors Company Oman (CCC) will undertake the road improvements at Darsait on behalf of Muscat Municipality on a 'Design and Construct' basis. Parsons have been named as design consultants in the project. CCC will also undertake repairs to a small section of Sultan Qaboos Street at Qurum that was swept away in flooding during the unusual weather conditions last June. The contractor will use micropiling to stabilise the slopes on either side of the carriageway that suffered a breach in the flooding, and was temporarily repaired soon thereafter.

Saturday, March 1, 2008

Internet Subscribers in Oman grows...but what about the level of service?

This is my first post in the blog in a long long that I'm back in Melbourne, I'm reading Times of Oman more keenly and that sorta keeps me goes...

In an article published by Times of Oman (Click on the header of the post to get to the original...I wont copy-paste anything but figures), it said that the subscriber base for internet services in Oman is now just over 100,000 (102,657 to be precise)...which is still only a small fraction of our neighbours (i.e. UAE)....

However, what nobody has pointed out yet is the level of service from OmanTel...which has been less than stellar in recent (or even before recent) times...the speed on the ADSL is redundant at 384 kbps, which hardly fits the definition for "broadband" anymore...the charges are pretty high as well at OMR 12 line rent + OMR 1 per GB....

Connection drop-outs, slow response times, and sometimes the ADSL line behaving slower than dial-up is not unusual..

If anyone from OmanTel reads the blog, get this stuffed into the heads of your technical department: We need more speed AND more reliability.

(The original article is here)