Oman Rail has requested bidders extend the validity of their offers by six months for the first segment of its 2,135-kilometre national railway project.

It is understood the request was made to all shortlisted bidders, including a consortium led by Italy’s Saipem as well as Salini Impregilo, also of Italy.

The financial offers are understood to have expired in December, which prompted the request for an extension.

A source familiar with the project said the difficulty in securing financing from lenders underpins the delay in the award.

“They are currently engaged in negotiations with both local and international lenders… they are seeking banks and looking at other alternatives as well,” the source tells MEED.

It is understood the bidders have agreed to the extension request. “The market is slow at the moment and significant changes in pricing [of materials and labour] are not expected over the course of the extension period,” the source tells MEED.

In September, Nathan Wiles, general manager for projects at Oman Rail, indicated that the firm is still undergoing due diligence and declined to provide a target date for the formal award of the scheme.

The company also recently acquired public utility status for the second segmentof the project, which could mean the next segment could be implemented as a public-private partnership (PPP), according to sources.

The original plan was for the GCC rail fund to take on 80 per cent of the Oman railway project and the rest to be paid for by the Omani government.

Construction on the first segment of the sultanate’s national railway, which links Buraimi to Sohar, was expected to begin before the end of last year. The total scheme is estimated to have a budget of $15bn and is one of the most challenging schemes to execute as it stretches across mountains and deserts.

Oman Rail has also prequalified firms for other segments of the rail scheme. These include the link between Duqm and Salalah port, Hafeet to Dharirah, and the stretch between Thumrait and Salalah.