In-Country Value Strategic Approach - Hamdy al marhuby

1. Presentation
To
MENA Rail & Metro
Summit
Tuesday , 6th October, 2015
In-Country Value Strategic
Approach

2. 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

3. 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

4. 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

5. ICV Strategy

6. 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

7. 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

8. 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

9. 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

10. 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
IISignaling 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

11. 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

12. 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

13. 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

14. SME Overview

15. We have long-term aspirations to play a pivotal
role in SME development based on six key
objectives
Strategic objective Goal Implications
Broaden
industry base3 Achieve lasting positive
impact on the industry
structure
> Time horizon: 20-30 years
> SME type: Gazelles
> Instruments: Market access, advisory
services and investments
Encourage
innovation4 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
entrepreneurship5 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
employment2 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

16. The SME support landscape has a multitude of
support stakeholders with potential to drive the
sector forward
Capability
building
Funding
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
Supportfocus

17. Route to Market tool
Oman Rail
Prime contractors
Prime contractor
Subcontractors
Sourcing
Contracting
Purchasing
Invoicing
Managing
suppliers
Dashboardandanalysis
Buyers
Registration
Business
mgmt.
Catalogue
mgmt.
Order mgmt.
Invoicing
Reporting
Suppliers
e-Market matching portal
Overview of planned e market matching platform

18. Training and Development
Strategy
Centre of Excellence

19. 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

20. 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

21. 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

22. It’s Character that
Creates Impact!
Shukran