Lots of snide remarks from my friends in the Ministries about why anyone would pick Galfar.Pointed questions in meetings about their performance, etc, etc. The on-going lawsuit over the [alleged] sub-spec road Galfar built for the Government is part of that perhaps.
Oh, and the Musandam hotel debacle.
But I haven't figured out the deeper reason behind the obvious dog-house treatment. Any ideas readers?
And here's more evidence of it. The recent tender for the airport went to a higher (OK, only just, $40 mln) foreign bidder.
That's gotta hurt.
But clearly the Government is finally becoming more aware that a low bid price isn't everything.
And Greeks and Turks working together? Cool!
Last trading day Galfar shares down 7%
Their shares took a 7% hit, and that's on top of the recent moves.
Galfar have really been hit surprisingly hard by the slowdown in project growth. I did consider them pretty solid last year, but they (over)invested a lot in capital equipment after the float to pursue the business strategy of never ending growth in Oman's infrastructure projects, plus continued big expenditure in the oil and gas sector. Now they are left with far too much capacity, kit they can't sell anywhere near book value, and cost cutting is the word of the day. So apparently lots of western Expats have been sent home, and its in with the NRIs.
Dr. Hans Erlings, an ex-Shell Engineer who worked in Oman previously and has been CEO of Galfar since public launch, must be under a bit of pressure to deliver. I hope not too much of his probably huge pay packet is in shares...
In the past year, their share price has basically dropped back to their IPO.
Galfar share price since launch
High bidders win Muscat Airport contract
A US $1.3 billion (OMR500 million) contract to expand Muscat International Airport has been awarded to Turkey's TAV Construction and the Athens-based firm Consolidated Contractors Co (CCC).
Oman’s Ministry of National Economy announced a number of contracts it had awarded on Tuesday. The joint venture CCC-TAV was given the contract even though it was not the lowest bidder for the work.
The two companies' price of $1.32 billion was outbid by the local Galfar Engineering and Contracting Company and India's Larsen & Toubro (L&T), which submitted the lowest bid of $1.28 million.
"We've won the contract as a joint venture with TAV (Turkey)," senior proposal leader at CCC in Muscat Zahi Saba told Reuters. "The contract should be announced by the client within the next few weeks and work should start thereafter."