GCC funding for Oman’s OMR6bn rail project

MUSCAT — Oman’s ambitious National Railway System will be implemented with funding support pledged by fellow members of the Gulf Co-operation Council (GCC) bloc, Darwish bin Ismaeel al Balushi, Minister Responsible for Financial Affairs, announced here yesterday.

The project is among a slew of infrastructure schemes identified by the government for implementation with financial assistance earmarked by the GCC states, Al Balushi said. The bloc has pledged a total of $10 billion in financial aid, payable in a yearly tranche of $1 billion over a 10-year period.

“The projects towards which the GCC financial aid will be utilised are currently being identified,” the Minister said. “They include the railway project, Al Batinah Expressway, electric and water networks, and the provision of infrastructure at Duqm Special Economic Zone and other industrial estates. Underlying all of these projects are objectives aimed at strengthening economic integration, serving the unified GCC market, facilitating the flow of trade and services, and the movement of citizens among the GCC countries,” he added at a press briefing held here yesterday to announce the 2013 Oman Budget.

Significantly, the announcement will help dispel misgivings about the government’s commitment to proceed with the implementation at this injunction, given the staggering cost of the venture, estimated at RO 6 billion. Seen in conjunction with Tuesday’s announcement by the Supreme Council for Planning, that the railway network will now be diesel-powered, as opposed to an earlier recommendation for electrical-powered locomotion, the move is expected to give strong impetus to efforts to accelerate the development of this strategically important project.

During a Q&A that following the budget presentation, Al Balushi explained that GCC financial aid to the Sultanate would be made available either as a collective contribution or through bilateral means.

“This assistance, as you all know, was decided initially as a collective initiative of four Gulf states to provide aid to the other two countries, which includes Oman. Later it was decided to treat this subject as a bilateral issue. Within this framework, we started coordinating with two specific countries with which we have since reached an advanced level of negotiations. The countries in question have asked for a list of projects to be financed, for which the required funding will be provided according to the progress made in the implementation of those projects,” he said.

Given the cost of the rail project, estimated in range of RO 6 billion, funding assistance is expected to come from all four GCC member states that have pledged financial aid to Oman, he added.

Oman’s National Railway System is part of the proposed inter-GCC railway network that will run from Kuwait to Muscat, and onward to Salalah and possibly to Yemen. The 1,061-kilometre national network will be built in phases. Phase 1 will consist of four segments: from Sohar Port to Muscat (comprising a 242km link from Sohar Port to Al Misfah (Muscat), an 8km spur line to Sohar Railway Yard, and a 20km link from Al Misfah to Muscat Central Station; (ii) from Muscat to Duqm Port (comprising a 486km line from Al Misfah to Duqm, and an 84km link from Sinaw to Ibra; (iii) from Sohar to the UAE border via Al Ain (comprising a 136km line from Sohar to Al Ain and a 27km spur to Buraimi; and (iv) from Sohar Port to Khatmat Malaha (58km) on the UAE border.

The double-track network will be designed for both passenger and freight transportation, although freight movement will be prioritised in the initial phases of the project.

@Oman Daily Observer 2013
By Conrad Prabhu, Jan 03 2013