oman rail - in-country value strategic approach
TRANSCRIPT
Presentation
To
MENA Rail & Metro Summit
Tuesday , 6th October, 2015
In-Country Value Strategic Approach
Oman Rail Network
Mazyounah
Thumrait
Salalah
Haima
Duqm
Sur
Muscat
Sohar Shinas
Nazwa
Bahrain
Saudi Arabia
Yemen
UAE Ibri
Ad Dhahirah
Buraymi
Muscat
Ibra
Ash Sharqiyah Sinaw
Ad Dakhliyah
Al Ghabah
Dhofar
Al Wusta
Amal Marmul
Al Batinah
Qatar
Key Facts
• 2,135 km linear network length
• Mainly double track
• Design speeds
– Freight - up to 120 km/h
– Intercity Passenger - up to 200 km/h
• Designed and built to blend of
international standards
– North American heavy haul, 32.4 tons
per axle
– European Train Control System Level 2
• Diesel traction for start-up with option to
electrify
Phase 1: Connects Oman’s 3 deep sea Ports, and GCC network
Heavy-haul network designed for double stack container trains
2
Builds Communities Ibri, Fahud, Dankh,
Quarn Alam, Haima
Amal, Marmul, Thumrait
B
3
A
More Than Tracks – Multiplier Affect
Port Inland
Freight Terminal
Supports Freezones
& Economic Development Areas Sohar, Duqm, Salalah,
Al Dhahirah, SABLA
In-Country Value Opportunities (SMEs)
Expands Investment Opportunities
Supports Global Investment Portfolio
Rail Supports Nation Building
Schools
Mosques
Shops
Hospitals
Homes
Creates
Jobs
Supports Other
Businesses
Project Status Summary
Tender Preparation
Segment 2
Contract Evaluation Stage
Segment 1 Construction
Supervision
Awarded/Mobilized
Integrated Management team
Training Management Consultant
Prequalification for Segments 2 – 4
ICV Strategy
Our ICV strategy was developed along a three step approach based on the Sultanate's long-term aspirations
ICV strategy development approach
1 2 3
> Benchmarking of similar programs
> Derivation of corporate aspirations
> Establishment of high-level ICV objectives
> Identification of potential ICV tendering measures
> Analysis of capacity/capability gaps for different work packages
> Allocation of suitable ICV tendering measures to individual work packages
> Definition of implementation roadmap (including ICV schedule for next tenders)
> Design of monitoring approach
Set ICV objectives Develop program of ICV measures for tendering
Define implementation and monitoring approach
As a result, our ICV vision builds on five key pillars
Oman Rail's ICV vision
Employment Earnings > Create new job opportunities for
Omanis
> Increase attractiveness of private sector
> Maximize revenues of Omani manufacturerers and service providers
> Maximize return on investments in newly established manufacturerers and service providers
Education Entrepreneurship
> Improve skill levels of the current Omani workforce
> Improve the sophistication level of Omani industrial sectors
> Encourage the establishment of new businesses in Oman
> Foster the development of SMEs
Economic diversification > Contribute towards GDP growth
> Increase share of logistics sector in the GDP
> Increase share of manufacturing sector in the GDP
ICV Pillers
ICV Development Framework
Preparatory Works Infrastructure
works Operations and
Maintenance Supporting
Services
Initial study identified more then 260 Products and Services that were then divided into the following categories:
Available in Oman Available but with Gaps Not Available in Oman
Classification of vendors into five tranches
Vendor assessment and classification
1 Registration
2 Pre-qualification
3 Classification
Yes
Maybe
No
1) Non-relevant vendors do not provide products or services required by the railway project 2) Potential vendors are not fully capable of delivering products and services required by the railway project, therefore are classified as maybe
Registered vendors
Non-relevant vendors1)
Tier 1 Vendors
Tier 2 vendors
Tier 3 vendors
Potential vendors
Delisted vendors
Potential vendors2)
Delisted vendors
Pre-qualified vendors
To maximize ICV creation, we will use different measures for different work packages
Tender contract types and work packages
IV Oman Rail procurement
16 work packages
II Signaling and telecom1)
7 work packages
I EPC
26 work packages
1) Signaling and telecom is typically part of the EPC tender
III Operations and maintenance
7 work packages
Tender Development Framework
To achieve our vision, we will rely on five key ICV measures during the tendering process
Overview of key ICV tendering measures
Omanization
Tenderer's plan for employing Omanis for specified positions or overall work package
Local procurement
Tenderer's plan for local procurement for each work package
Training & Development
Tenderer's plan to develop skills for specific positions
Development of Omani subcontractors
Tenderer's plan to improve capabilities or capacity of sub-contractors through joint ventures or partnerships
Alternative ICV creation
Tenderer's plan for ICV-creating measures (e.g. building a factory in Oman)
Tender Development Framework
To ensure successful execution, we developed a comprehensive implementation plan incl. detailed ICV schedule for tenders
Overview of ICV schedule
Key elements of ICV schedule
> Carries a 20% weight in technical proposal evaluation
> Background for ICV requirements
> Detailed ICV requirements to be fulfilled by contractor bids for
– Local procurement
– Omanization
– Trainings
> Evaluation methodology for ICV Plan
> Monitoring methodology throughout project execution phase
> Templates to be used by contractors for their bid submissions
Implementation and monitoring approach
Penalties for non-compliance with ICV will be gradual starting with a verbal warning potentially leading to termination/ blacklisting
Non-compliance with ICV plan
Implementation and monitoring approach
Non-compliance for one period
Verbal warning
Non-compliance after 2 verbal warnings
Official warning
Non-compliance after 2 official warnings
Financial repercussion
Failure to abide by mitigation plan
Termination and blacklisting
ICV Non-compliance penalties
SME Overview
We have long-term aspirations to play a pivotal role in SME development based on six key objectives
Strategic objective Goal Implications
Broaden industry base 3 Achieve lasting positive
impact on the industry structure
> Time horizon: 20-30 years
> SME type: Gazelles
> Instruments: Market access, advisory services and investments
Encourage innovation 4 Encourage research
and development by Omani SME
> Time horizon: 20-30 years
> SME type: Innovative SMEs
> Instruments: Investments, market access and human capital development
Foster entrepreneurship 5 Encourage more
Omanis to start-up their own businesses
> Time horizon: 10-20 years
> SME type: Start-ups
> Instruments: Seed funding, advisory services and human capital development
6
Economic diversification
The sum of all four strategic objectives lead to economic diversification
Increase SME participation
Increase number of contracts awarded to SMEs
> Time horizon: 1-10 years
> SME type: All types
> Instruments: Market access
Create employment 2 Increase employment
of Omanis > Time horizon: 2-5 years
> SME type: High growth active in sustainable railway products & services
> Instruments: Lending and market access
1
The SME support landscape has a multitude of support stakeholders with potential to drive the sector forward
Cap
abili
ty
bu
ildin
g Fu
nd
ing
Overview of SME stakeholders in Oman
> Most SME programs are still relatively young and lack scale to achieve visible and lasting impact on the SME sector
> A national SME strategy is underdevelopment to achieve focus and coordination between various stakeholders need
> Current SME support programs are vying for similar objectives
> Need to build awareness and understanding of the available support mechanisms by SMEs
Public sector Private sector
Sup
po
rt f
ocu
s
Route to Market tool
Oman Rail
Prime contractors
Prime contractors
Subcontractors
Sourcing
Contracting
Purchasing
Invoicing
Managing suppliers
Dashboard
and a
naly
sis
Buyers
Registration
Business mgmt.
Catalogue mgmt.
Order mgmt.
Invoicing
Reportin
g
Suppliers
e-Market matching portal
Overview of planned e market matching platform
Training and Development Strategy
Centre of Excellence
Training needs have been identified by prioritizing job categories based on type, skill level, manpower demand and feasibility
Preparation of long-list of jobs (under contractor and Oman Rail)
Filtering of long-list
Development of competency profiles
III
II 275+
30
Assessment criteria
Most critical jobs have been identified using 4 basic filters:
> Type of job:
– Managerial and admin. jobs excluded
– Technical and business professional job categories selected
> Level of skill required:
– Unskilled jobs excluded and only skilled and semi-skilled jobs considered
> Potential volumes of jobs to be created:
– High level estimates drawn to classify job categories by expected demand
– Job categories with at least 20 positions considered
> Feasibility of training:
– Jobs requiring significant experience (e.g. CXOs) cannot be trained for and hence excluded
Prioritization approach
I
Prioritizing Job Categories
A Training Management Consultant is responsible to define training standards and quality control
Needs Assessment Program Requirements Quality Control
1 2 3
✓ > Develop a competency
framework for Oman Rail operations and contractors
> Prescribe minimum safety and competence standards for each job as per international best practices
> Identify training requirements
> Translate requirements to training obligations for the EPC contractor(s) and operations partner through contractual guidance
> Recommend curriculum design and structure
> Monitor compliance to training obligations
> Conduct periodic quality assessments
> Ensure consistency of trainings
> Assess trainees and provide certifications
> Coordinate with regulators for licensing (e.g. for train drivers)
~ 6 months ~4 years
A TMC will be appointed for the initial 4 years, allowing Oman Rail to gradually build its own in-house team
Training Management Consultant
The Centre of Excellence can support Oman Rail's vision of becoming a railway knowledge hub in the region in the long term
Phase I: Local capability building
> Acquire railway expertise through partnership with global operators
– Establishment of O&M training facilities
– Devpt. of skilled workforce by international exchange
> Incorporate international best practice with TMC
– Development of Standards
– Quality Control
Phase II: Export of knowledge and expertise
> Supply Skilled Manpower and experts to railway companies in other countries
> Promote applied research through collaborations with universities
– Develop solutions for problems specific to railways in the unique local environment
– Develop a railway knowledge and competence center
Partnership with global operators for O&M training
Partnership with railway training expert to adopt international best practice
Supply of skilled workers and railway experts Provision of railway knowledge
and research solutions
Railway Knowledge Hub
It’s Character that Creates Impact!
Shukran