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Momentum builds in Oman construction

3 December 2025

 

The Omani construction and infrastructure projects market has largely maintained its momentum in 2025, with more than $2.5bn-worth of contracts awarded by late November.

At the time of writing, the outlook for the remainder of the year was promising, supported by a further $1bn-worth of schemes expected to be awarded before year-end.

If achieved, this would mark the third consecutive year of $3.5bn in awards or more – echoing the higher activity seen in 2013-17. It would also be a continuation of the steady growth Oman has experienced since emerging from the Covid-
19 pandemic in 2021 and following the leadership transition in 2020, when Sultan Haitham Bin Tariq Al-Said succeeded Sultan Qaboos Bin Said.

Transport contracts

A major milestone for Oman’s construction sector came in May, when three contracts worth over RO258m ($670m) were awarded for packages three, four and five of the Adam-Thumrait Road dualisation project.

The contracts were awarded to joint ventures comprising local and Saudi-based firms.

In November, the Ministry of Transport, Communications & Information Technology awarded a $117m contract to the local subsidiary of Austria’s Strabag for the construction of Al-Mouj Road and its connection to 18 November Street in Muscat.

Several major road projects are expected to be awarded imminently as tendering progresses. In October, 13 firms submitted bids for the design-and-build contract for a dual-carriageway in Sohar in North Al-Batinah Governorate.

A contract award is also expected soon for the remaining works on parts one and three-A of the Adam-Thumrait dualisation project, for which local contractor Al-Hashemi Al-Rawas Trading & Contracting submitted the lowest bid of $116.5m in September.

Airport development is also moving forward. In July, the Civil Aviation Authority (CAA) prequalified 20 local and international firms for a tender covering enabling works at Musandam airport.

The CAA also tendered engineering and design contracts for the Jabal Akhdar, Masirah and Sohar airports.

These projects fall under the National Aviation Strategy 2030, which aims to attract $3.6bn of investment in airport cities over the next two decades.

According to MEED Projects, Oman has a pipeline of more than $20bn-worth of infrastructure schemes, the largest of which is the Muscat Metro.

In November, it was reported that studies for the proposed Muscat Metro scheme had been completed. The scheme is expected to span 55 kilometres with 36 stations and cost around RO1bn ($2.6bn).

Real estate

Real estate development is also gaining pace, with several masterplanned projects advancing. Since assuming leadership, Sultan Haitham has pushed forward a number of major schemes.

Among them is the New Smart City Salalah development, a 7.3-square-kilometre project on Oman’s southern coast. In October, 20 local and international engineering firms expressed interest in bidding for the detailed design contract.

Progress is also evident on Sultan Haitham City, the most high-profile masterplanned development in the sultanate, overseen by the Ministry of Housing & Urban Planning (MHUP).

Since last year, the ministry has signed multiple agreements for infrastructure works, including roads, electricity, water, sewage, irrigation, telecommunications and district cooling networks.

Tendering has also resumed on the Grand Blue City project, also known as Al-Madina Al-Zarqa, located along the Al-Sawadi seafront about 100km northwest of Muscat. Originally launched in 2005, the scheme stalled during the global financial crisis.

Preparatory works are now expected to begin soon for phase one, which includes 100 luxury villas, 202 lagoon villas, a five-star hotel, 130 serviced apartments (from studios to three-bedroom units) and 270 residential apartments.

Another major development near the capital is Al-Khuwair Downtown, close to Muscat International airport and also led by MHUP. The contract for the marina infrastructure package is expected to be awarded soon following bid submissions in August.

MHUP is also progressing the Omani Mountain Destination at Jabal Al-Akhdar, located 150km from Muscat. The $2.4bn project includes 2,537 housing units, 2,000 hotel rooms and a health and wellness village at an altitude of 2,400 metres.

Other major upcoming MHUP-led schemes include Al-Thuraya City in Muscat and the Khor Grama project in Sur in the Ash Sharqiyah South Governorate.

Investment avenues

Foreign investors are playing a role. Egyptian developer Talaat Moustafa Group Holding (TMG) recently announced RO1.5bn ($4bn) of investment across two real estate projects in Muscat.

Public-private partnerships (PPPs) are also supporting growth. In November, Oman tendered three key road schemes on a PPP basis: the Salalah-Thamrait road, the Muscat-Al-Dakhiliyah road (Al-Maabela–Thumayd section) and the Bausher-Al-Amerat tunnel road, alongside the Al-Amerat-Dima Wattayeen road.

All these subsectors are expected to generate opportunities for construction companies over the coming years. The market also has the potential to grow far beyond its achievements last year. While that growth was positive, analysis of the historical numbers shows that the Oman market can achieve much more. In 2014, when the market peaked, there were over $9bn of awards – more than double the last year’s total. 

 

 

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Yasir Iqbal

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