While government policy has been the key driver of growth in Oman’s transportation sector, decision-makers have also encouraged public-private partnerships (PPPs) and other forms of private sector involvement in transportation developments. The sultanate has attracted several foreign investors to its infrastructure projects, and is set to see increased investment as it moves forward with the construction of a national railway project. Government tenders are catching the eye of investors that offer international expertise to assist with projects stretching across Oman’s diverse terrain.


Perhaps the most significant project offering opportunities for foreign investors is the government’s planned national railway. The newly formed Oman Railway Company will be responsible for tendering multiple phases of development to private firms. A project of this scope and magnitude will require hitherto unseen levels of investment across a multitude of sectors, with the sultanate’s national rail symposium, hosted in Muscat in September 2013, bringing investors and ministry officials closer to inking deals.

Although the initial tender process was delayed from September 2012 to August 2013, Italian national railway firm Italferr was awarded the OR12.35m ($31.99m) contract to provide engineering consultancy for the project in August 2013. The rail project is still at the development stage, and the government is in the process of selecting a project management consultant from a group of five international firms that have submitted bids for the project, with a decision expected in early 2014. A tender for the design of nine new freight yards was also floated in March 2013.

At the national symposium in September, Italferr’s Middle East regional head, Luka Beccastrini, highlighted the vast investment opportunities presented by the project. The construction of more than 2200 km of lines will require an estimated 12,000 km of rail, making a rail production plant in the sultanate not only viable, but also lucrative to operators. Rolling stock requirements include 40 freight locomotives, 30 shunting locomotives, five recovery locomotives, 30 diesel multiple units for passengers, 15 diesel locomotives for passenger trains, 80 passenger coaches and 500 freight wagons, according to Beccastrini. Italferr’s master plan also envisages the construction of 30 small stations, 10 intermediate stations and six large stations. Beccastrini estimates that the project will require construction of 3000 km of unpaved roads, 1000 km of paved dual carriageways, 35 km of tunnels, 45 km of viaducts, 39 km of rail bridges and 48 km of wadi (valley) bridges.

A range of opportunities exist for logistics firms as well. DHL, which already holds a 60% market share in Oman, has signed on with the government to increase services. Partnering with Oman Air, DHL began offering cargo flights in the sultanate in March 2013. As the national railway rolls out, DHL and other logistics providers are poised to expand their activities. “The railway is more than just an infrastructure project. It is an economic opportunity. To generate maximum results, we will ‘Omanise’ it and develop downstream industries around it,” Ahmed bin Mohammed bin Salim Al Futaisi, minister of transport and communications, told OBG.


Highway development has also attracted high levels of foreign investment, as the government seeks to increase land links between the sultanate’s towns and cities, as well as with its GCC neighbours. The government has moved to invest heavily in the segment, signing six deals to develop highways worth an estimated OR159.09m ($412.04m) in August 2013. The Al Batinah Expressway project saw the most significant investment in 2013, as the government sought to transfer commercial shipping activities from the port at Muscat to Sohar, with an anticipated influx of highway traffic between Sohar and Muscat once the transfer is finalised in 2014. The project is divided into 11 packages, with five already awarded, one re-tendered and five expected to float in the near term, for a total investment value of OR1bn ($2.59bn). More than $1.7bn in contracts have been awarded by the government to various global firms for the project in 2012 and 2013.

The first package, a $361m contract to construct 45 km of expressway, was awarded to Galfar Engineering in 2012, and is currently under construction, with package three, an OR122.4m ($316.9m) contract for 43 km of expressway, awarded to India’s Simplex Infrastructure in April 2013. The second package, an OR123.2m ($319.1m) contract for the construction of 44.75 km, was initially awarded to a joint venture (JV) between WCT and Oman Roads Engineering Company, but the deal fell through in April 2013, and the government re-tendered the contract. The fourth package, an OR135.6m ($351.2m) contract involving the construction of 50 km of expressway and five major bridgeworks, was awarded to Larsen & Toubro in July 2013. The fifth package, a 41-km section of expressway including three major bridge works, followed in August 2013, with the JV between contractor Federici Stirling Batco and Spanish construction group Ferrovial winning the OR132.6m ($343.4m) contract. The sixth package, covering 45 km of expressway, was awarded to Consolidated Contractors Company for $322m in August 2013.


Outside of Al Batinah, opportunities abound. A $36.1m contract was awarded to Strabag International Oman to construct roads in South A’ Sharqiyah, including a bridge and four entrance improvements, while a contract worth $26.1m was awarded to Al Oula International to construct 73 km of highway in the A’Dakhiliyah governorate. In August 2013 over 30 firms submitted bids for a $1.1bn highway project linking Diba to Khasab in northern Musandam.

Moving forward, the Ministry of Transport and Communications (MoTC) announced that it would float a number of new tenders in late 2013 and into 2014, including a major contract for the dualisation of 715 km of highway on the congested Muscat-Salalah road, which has been in the development stage for two years. The ministry also announced in March 2013 that it would construct a 25-km causeway linking Masirah Island to Oman through the village of Shanna, a capital-intensive project that would create the Middle East’s largest causeway, with costs estimated between $519m and $649m. The government floated a tender for a project consultant to conduct a feasibility study in February 2013, with eight firms submitting bids.


Economic diversification through tourism development is critical to the Vision 2020 plan, and the government has invested heavily in airport upgrades in recent years. Expansions at Muscat International Airport and Salalah Airport will boost capacity, while four regional facilities are in various phases of planning and construction. Private sector involvement has played a key role in moving airports projects forward. In November 2012, for example, Hill International was awarded a $109m contract to provide consulting engineering services on the airport expansion projects. The MoTC has also tendered construction works to a host of global firms, including Turkey’s TAV, Bechtel, Thales, Munich Airport and Raytheon, with total investments set to reach $6.1bn. In July 2013, the MoTC floated two tenders for the design and construction of cargo and maintenance-repair-overhaul facilities at the Muscat and Salalah airports, with six companies submitting bids that ranged from OR119.5m ($309.51m) to OR177.2m ($458.95m). In August 2013, the government awarded a series of transportation contracts, with OR32.7m ($84.69m) allocated to aviation developments. The largest of these contracts was a $22.6m deal signed with JBT Aerotech for the supply of 40 Jetway boarding bridges at the new Muscat airport.

The Oman Airports Management Company (OAMC) will require substantial private participation as it transitions into new facilities in Muscat and Salalah, and is already working to secure contractors for a number of airport projects. In September 2013, OAMC floated an international tender for the operation and maintenance of baggage handling systems at the Muscat and Salalah airports, with the contract awarded to Dutch group Vanderlande Industries in November 2013. In September, OAMC also entered into a JV with Singapore Airport Terminal Services to develop advanced cargo facilities for all of Oman’s airports, aiming to expand the air cargo sector substantially in the years ahead.