Oman’s infrastructure, especially its road network, has expanded greatly in recent decades. In 1970, before the accession of Sultan Qaboos to the throne, Oman had only ten kilometers of roads. According to Oman’s Ministry of Transport and Communication, Oman now has 12,402 kilometers of paved roads and 17,009 kilometres of graded roads. There are six main ports in Oman—Matrah, Salalah, Qurum, Sur, Sohar, and Duqm—and several smaller fishing harbors. The ports of Sohar (partially owned by the Port of Rotterdam, the Netherlands) and Duqm have been assigned particular importance to Oman’s industry and trade. The old port of Matrah, traditionally a fishing and trading port, will be developed to serve tourism and leisure travel.
Despite the significant growth in the last forty years, Oman lags behind its Gulf Cooperation Council (GCC) neighbors in infrastructure, according to Middle East Economic Digest (MEED). Infrastructure that has been built since 1970, particularly in the capital area (Muscat), is struggling to cope with the high rate of growth in mobility. Cities, towns, ports, and airports are far apart, and the current network of roads does not adequately serve Oman’s industry and trade and its tourism potential.
It is this potential that needs to be realized, in order to boost the national economy. Protests by Omani nationals in recent years, demanding more jobs, have shown that the country needs economic diversification to create more employment opportunities. Moreover, Oman has just 17 years of oil production left (at current extraction rates) and hence is under more pressure than other GCC states to invest in non-oil sectors. To support this diversification, expansion of the current transport network is needed. Realizing this need, Oman is investing heavily in upgrading the road network, developing a national railway system, and expanding airports and seaports to serve the growing tourism sector and the development of industry and trade. Ahmad bin Hassan al-Dheeb, undersecretary of the Ministry of Commerce and Industry, told MEED last year that the sultanate would spend about 20 billion USD on transport projects in the coming years.
Railway
A new national railway, connecting the UAE border with the Port of Sohar, Muscat, the new port of Duqm, and the southern city of Salalah, will be part of a wider railway network in the GCC. That network, which is planned to extend from the Iraqi border in Kuwait to Muscat, has been in development since 2008. The Omani government decided to extend the railway towards the south, eventually connecting southern Oman with the Etihad Rail network in the United Arab Emirates and further afield.
This is expected to serve Oman’s ports on the Arabian Sea coast and maximize their potential. In this way, the sultanate is trying to bring international shipping companies to its shores, taking advantage of rail transport, instead of facing delays at crowded ports in the Gulf. In addition, Oman would offer an alternative route for freight transport in case regional tensions should disrupt shipping through the strategic Strait of Hormuz (through which about one-third of the world’s oil supply is currently shipped).
The diesel-powered rail line will also feature passenger services, improve access to remote areas, and boost economic activity in the regions beyond the capital. Yet, given the fact that the car remains the preferred mode of personal transport in the Gulf, it remains to be seen whether many Omanis will use the train.
Construction on the 2,244-kilometre long railway, costing an estimated 15 billion USD, is planned to begin in early 2015. Design, planning, and construction will be carried out by consortia of international companies, but the Omani government is seeking to maximize local staffing and manufacturing capabilities, according to MEED. As with the construction of roads in the sultanate, the double-track railway will pose an enormous engineering challenge due to Oman’s mountainous and rocky terrain, requiring many bridges, tunnels, and underpasses. The network is planned to be operational by 2018 or 2019, but MEED characterizes this as ‘overly ambitious’, given the current rate of the procurement progress.
According to Construction Week Online, Oman’s logistics market is set to grow by 50 percent, to 12 billion USD, by 2017. This would mean a positive outlook for Oman’s growing role in logistics, and consequently, for the country’s economic diversification.
Roads
Another cornerstone of investment is the construction of new roads and the upgrading of existing ones. In its five-year economic plan (2010-2015), Oman has allotted 3.2 billion USD for road construction, with this infrastructure category ranking second highest, after airports. This indicates the importance the government has attached to improving Oman’s road network. Areas that used to be remote and inaccessible have already been connected with Muscat and other towns in recent years, through new roads and dual carriageways. Contractors have succeeded in overcoming the country’s diverse geographical conditions, which pose an engineering challenge. Whole mountains have been blown up to make way for roads, or motorways have been constructed right across intervening mountains, as is seen in the case of the dual carriageway connecting Muscat with the suburb of al-Amarat.
A better land connection to the UAE has been planned, with the construction of the Batinah Expressway, connecting Muscat with the UAE border and the port of Sohar (at a cost of approximately 2.59 billion USD, according to MEED). The Batinah Expressway, the largest of all Oman’s road projects, will primarily support the port of Sohar, which has grown significantly in recent years. As the first four-lane motorway in the country, the road will further open up Sohar to markets in the United Arab Emirates. Another major project is a new dual carriageway planned to improve access to the Musandam peninsula, running through mountainous terrain and including seven tunnels and 18 bridges, at an estimated cost of 1 billion USD.
Airports
Oman is spending billions of dollars to improve its airport infrastructure as part of an effort to boost its economy, and the tourism sector in particular. Muscat International Airport, which handled 6.8 million international passengers in 2012, is currently being expanded. A new passenger terminal, runway, and control tower are planned to open in late 2014 and are set to increase the airport’s passenger capacity to 12 million by 2014. Future extension phases are planned to expand capacity to 48 million passengers (which is still far less than Dubai International Airport, for example, which handled more than 66 million passengers in 2013). Salalah airport, in the governorate of Dhofar, is also being expanded and will see its capacity grow to one million passengers a year. In addition, regional airports are planned for Sohar and Duqm (under construction) and Ras al-Hadd and (supporting the tourism sector).
While the outlook looks promising, Oman faces the huge challenge (apart from its challenging terrain) of securing the resources and skills needed to execute these projects, while so many other major projects are under way in Oman and elsewhere in the Gulf.
Ref: Fanack