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Oman construction continues its positive trajectory

10 December 2024

 

Oman has had its best year for construction and transport contract awards in nearly a decade in 2024. By late November, there had been $4.1bn of awards, which already exceeds the $3.6bn recorded in 2023, according to regional projects tracker MEED Projects. 

The total for 2024 is the first time the market has exceeded $4bn since 2015 and builds on the steady growth that the sultanate has delivered since it emerged from the Covid-19 pandemic in 2021 and the change in leadership in 2020, when Sultan Haitham Bin Tariq Al-Said replaced Sultan Qaboos Bin Said. 

Transport contracts

The big moment for Oman construction in 2024 came in April, when three civil works contracts were awarded for the Hafeet Rail project connecting Oman and the UAE. The estimated AED5.5bn ($1.5bn) design-and-build contract was awarded to a consortium of Abu Dhabi-based National Projects Construction, National Infrastructure Construction Company, Tristar Engineering & Construction and Oman’s Galfar Engineering & Contracting.

Hafeet Rail may be just the start of rail projects in Oman. In February, it was reported that studies for the proposed Muscat Metro scheme would be completed by the end of 2024. The scheme is expected to stretch 55 kilometres (km) and have 42 stations. The project is expected to cost about RO1bn ($2.6bn).

There has also been a steady flow of road contract awards in 2024. According to MEED Projects, there were close to $1.9bn of road construction contracts in Oman by the end of November. Three awards totalling $667m were awarded in November to contractors for work on the Adam to Thumrait highway. 

Airports projects are also being planned. The Civil Aviation Authority appointed Swiss engineering firm Renardet SA & Partners to prepare designs for Musandam airport in March, and later in the year, it tendered engineering and design contracts for the Jabal Akhdar, Masirah and Sohar airports.

These projects are part of the National Aviation Strategy 2030, which aims to attract an investment of $3.6bn in airport cities over 20 years.

Real estate

Real estate development is also gathering pace, with several masterplanned developments going ahead. Since coming to power, Sultan Haitham has pushed ahead with key schemes, some of which had been on hold for a number of years. One of these is the Grand Blue City project, also known as Al-Madina Al-Zarqa, located along the Al-Sawadi seafront, almost 100km northwest of Muscat. The project was first launched in 2005 and stalled during the global finance crisis. 

In June this year, the Oman Investment Authority-backed Grand Blue City Development Company awarded local contractor Galfar Engineering & Contracting the marine works for the project, which is the clearest sign yet that construction work is gaining momentum.

The most high-profile new masterplanned project is Sultan Haitham City, which is managed by the Ministry of Housing & Urban Planning (MHUP). In February, MHUP signed contracts worth RO1bn ($2.6bn) to develop the first phase of Sultan Haitham City. The first phase includes the development of a city centre and six of the development’s 19 planned neighbourhoods. Completion is expected in 2030.

Another masterplanned development near the capital is Al-Khuwair Downtown, which is close to Muscat International airport and is also being developed by the MHUP. Design work is progressing on the scheme, which includes a marina, waterfront with beaches and sports facilities, canal and promenade areas, a cultural quarter and a ministry campus.

Another MHUP project is the Omani Mountain Destination on Jabal Al-Akhdar, 150km from Muscat. The $2.4bn destination includes 2,537 housing units, 2,000 hotel rooms, and a health and wellness village, all situated at an altitude of 2,400 metres above sea level.

Investment avenues

Foreign investors are also playing a role. Dar Global is developing the Aida project, and this year, it launched The Trump International Resort, Golf Club & Residences. The estimated $500m development comprises a 140-key five-star hotel, villas, serviced apartments, an 18-hole championship golf course, a club and a nightclub.

As well as traditional real estate investment, public-private partnerships are playing a role. The Asyad Group is tendering a 4,925 square-metre office complex in the Muscat airport free zone, with the selected firm developing it on a design, build, finance, operate and transfer basis over 25 years.

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 in 2024. 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 2024 total. 

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Colin Foreman

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