Muscat airport expansion plan faces further delay – official

Oman’s airport operator wants to earmark a large area of land to develop aviation facilities, including a maintenance hub and free trade zones, as the country seeks to reduce its dependence on oil, an aviation official said.

Salem al-Yafaey, general manager of Salalah Airport, part of Oman Airports Management Company, also announced a further delay in the expansion of the Muscat International airport.

A new passenger terminal with annual capacity of 12 million travellers at the Sultanate’s main airport is now due to open by the end of 2016, about a year later than the previous estimate.

The original completion date was for early 2014 but issues such as the arrest of illegal workers and technical difficulties have caused delays.

The airport operator proposes to set aside 4,500 square kms near five local airports, all of which are under construction or being expanded, for long-term development of the aviation sector.

The proposal fits into Oman’s bigger plan to expand the transport and logistics sector.

“We want to have sustained, value-added investments that will feed revenue to the economy for the long-term,” Yafaey told Reuters.

Facilities planned for development on the land include maintenance and repairs, a flight school, a commercial complex, conference buildings and dedicated free trade zone areas for direct and trans-shipment of goods.

The proposed development plan will be presented to the board of the airports’ operator by the end of October, Yafaey said. After that, government approval will be needed and the projects will be presented to investors.

The aviation-related projects may move at a leisurely pace due to funding issues as Yafaey said the government is not looking at raising debt and will invest around 40 per cent of the project value.

Oman is looking to private investors to stump up the remaining 60 percent of the investment, although officials did not release an estimate for the project’s overall cost.

The state finances of all the Gulf oil exporters have been hit as crude prices slumped after June 2014, hitting a six and a half low in August.

Oman has been spending heavily to diversify the economy beyond petrochemical revenues, which accounted for around 50 per cent of 2014 gross domestic production.