EXCLUSIVE: Firms win Oman Rail consultancy contracts

08 May 2017

Loan to finance services obtained in December 2016

Oman Railway Company (Oman Rail) has awarded the multifunction consultancy contracts for the sultanate’s planned mineral rail line.

US-based Parsons and Lebanon’s Khatib & Alami each received a letter of award for the consultancy services contract in April. A joint venture of Rete Ferroviaria Italiana (Italian Railway State Company) and Italferr is understood to have been selected for the third contract.

The scope of the multifunction consultancy contracts are:

  • operation and maintenance
  • infrastructure
  • rolling stock
  • management
  • railway facilities
  • mass transit system
  • auxilliary services

The contracts will be on a call-off basis within a period of two years, which means Oman Rail will be able to access the consultants’ services within the specified term.

In December, Oman Global Logistics Group (OGLG), parent of Oman Rail, obtained a $36m financing from the Asian Infrastructure Investment Bank (AIIB) to fund the consultancy services. The remaining $24m is being funded by OGLG.

The budget is understood to cover the cost of the multifunction consultancy contracts as well as the office equipment and project management activities.

In 2013, Italferr won the $37m contract for the preliminary design for the Oman National Railway scheme.

However, following the cancellation of the tender for the second stage of UAE’s Etihad Rail in January 2016, Oman decided to refocus its national railway programme from connecting to the planned GCC railway network to building a domestic rail system that caters to its mining sector.

The shift in strategy compliments Oman’s plan to revitalise its mining sector in line with its long-term economic diversification strategy.

Despite its significant reserves, mineral exports accounted for only 4 per cent of Oman’s total exports in 2015. The sultanate’s Ninth Five-year Development Plan, from 2016-2020, aims to increase the economic contribution of five key sectors including transport and logistics, mining, and manufacturing, in order to reduce oil dependence.

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