$36 million AIIB loan to part finance Oman Railway Preparation Project

GROUNDWORK: Objective of the Project is to achieve full readiness for the construction of a new railway system, says multilateral development bank

Dec 25: A groundbreaking, albeit modest, loan of $36 million extended by the Asian Infrastructure Investment Bank (AIIB) earlier this month, will help finance the groundwork for the execution of a national railway network under the auspices of Oman Rail.

In providing the funding — one of two loans announced by the Beijing-based Bank in support of Omani logistics projects — AIIB said it was meeting 60 per cent of the cost of the ‘Railway System Preparation Project’, estimated at $60 million.

“The objective of the Project is to achieve full readiness for the construction of a new railway system that will support the Sultanate of Oman with the diversification of its economy and to develop the Sultanate of Oman’s position as a transport hub and as an exporter of minerals,” the (Picture for illustration only) multilateral development bank stated.

Importantly, the preparation project identifies three key goals. The first emphasises the importance of completing the design of the Engineering, Procurement, and Construction (EPC) contracts for the mineral lines, along with the preparation of the corresponding tender documents.

Following a decision by Oman and fellow member states of the GCC bloc to defer the implementation of the GCC Railway System in light of the constrained fiscal environment, Oman Rail has prioritised the development of Segment 4D, which centres on the construction of a Mineral Line in the south of the country. Segment 4D, according to Oman Rail, will provide “low-cost rail transport connectivity to Oman’s fledgling mineral industry by reducing logistics bottlenecks to bring significant economic value to Oman”.