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Build, and they will come

Updated: Sep 3, 2019








Stephen Thomas

CEO

Renaissance Services


Renaissance is a leading international facilities management and service solutions company, listed in Oman on the Muscat Securities Market. The company provides hard, soft and integrated facilities management, and operates the Renaissance Villages. Their flagship project is located in Duqm’s Special Economic Zone.


What is the current range of Renaissance Services' operations in Oman?


Renaissance Services in an integrated facilities management company. Our clients range across oil and gas, military, hospitals and almost everything in between. We also build, own and operate permanent accommodation for work forces. This is addressing the issue of ensuring that blue collar work forces live in high standard facilities with dignity and respect, but at affordable cost.


In Duqm we have built a facility to house over 18,000 people. It is fully operational and as of June 2019 we have just surpassed 50 percent occupancy. Within this facility we also provide meals, recreation, medical and maintenance services – basically the full range of our facilities management offering.


How would you describe the journey which your organization has experienced in Duqm – from initial investment to where you are now?


It has been very interesting. We had to make a decision to build what is essentially a small town for 18,000 people in the middle of the desert, at a time when the entire population of Duqm was less than 18,000! However, we very much believed in the government's vision for Duqm and in SEZAD's vision. In this line of business it would not have made sense for us to say "we'll put the accommodation there once the projects start". So we took a bold decision to invest approximately $200 million. It was key to trust that projects like the Duqm Refinery would happen. That is the catalyst project which will spur the other downstream projects that will follow. There was a delay in getting that project off the ground, and the crash in the oil price did not help, as this impacted fiscal policy. In the end the refinery got underway about two years later than originally expected, but I believe the two years were used very constructively, in terms of tightening up the business case for a viable refinery. That delay however also impacted us. During that period we did have other projects taking place in the area – the port, the airport, the drydock – but these were smaller groups of contractors. We had to sustain losses over that two-year period, amounting to approximately 6 million Omani Riyals ($15.6 million). Now the project is happening and the EPC contractors are our clients at the Renaissance Village. From January 2019 we have turned to profit. There's been a lot of positive feedback from our clients, who have not just been project staff, but also military from various countries. It's been a very positive 2019.


What are some of the main benefits which Renaissance Village has brought to Duqm?


All of the recreation, gymnasiums, swimming pools and multi-purpose spaces – all of the things which you don't get from the usual industrial camp living – these create a lifestyle and enormous well being for our residents. Beyond that, contractors can come to Duqm and know there is no capex required to accommodate their employees. They can mobilise immediately. We also, therefore, create a level playing field of accommodation cost when contractors are bidding for projects. More broadly speaking, the work of the United Nations, through the International Labour Organisation, to raise awareness about employment standards and definitions of modern slavery, is really important. It ought to be a great source of pride to us here in Oman that we are upholding those standards and showing that we are able to promote decent living in an economical way.




What lessons have you learned along the way?


Renaissance Village is a great enabler for Duqm. But its success didn’t happen overnight. So, as long as you have the patience to wait during the initial build-up period, there will be rewards. Of course, people's nerves - shareholders and other key stakeholders – may get a little frazzled during that period, but remaining focused on the long-term picture is what helps you stay on the right path.

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