Work starts on new economic city in Oman

Khazaen Economic City is looking to attract investors in industrial and logistics sectors

An image of Khazaen Economic City, a 52 square kilometre city under development in Barka, 60km north of Oman's capital city, Muscat. Courtesy of Khazaen Economic City

The first construction contract has been awarded on a major new economic city development in Oman.

Galfar Engineering & Contracting won a 9.2 million Omani rial (Dh87.9m) contract for infrastructure works at Khazaen Economic City, a 52 square kilometre, logistics-led city being developed in Barka, 60 kilometres north of Muscat. The contract involves the construction of roads, street lighting, stormwater drainage channels and potable water networks, and will take 10 months to complete. Work is expected to start in October.

Khazaen Economic City is being built under a public-private partnership agreement between Asyad Group — a state-owned company that owns ports and transport assets, including Oman Post and bus operator Mwasalat — and Khazaen Economic City, which is majority owned by Oman Investment Corporation.

Khalid Al Balushi, chief executive of Khazaen Econonic City, told The National that the site was chosen because it is on the Muscat-Al Batinah highway, linking the ports of Sohar and Suwaiq with Muscat.

A master plan created by construction consultancy Atkins contains "a number of components which we consider as anchor elements of the project — and which we believe will drive business investment and relocation to the city, as well as residential population growth."

The city is expected to be built out over a 20-year period but the 3 million square metre first phase (1A), will focus on some of the key elements, including a dry port of about 487,000 square metres, a 964,000 sq m fruit and vegetable market, a 500,000 sq m auto mall and an 800,000 sq m business and technology park. Later phases will include more logistics, industrial, retail and residential space.

Mr Al Balushi said the dry port is the first in the country and will be operated Marfai, a government port services company owned by Asyad Group.

"Commercially, we see a good business case for developing a fruit and vegetable market in Khazaen due to its central location in the country — allowing rapid access to all population centres. The market will also cater to direct export and reimports across other parts of the food value chain," he said.

"The auto mall is also key for Oman as there is currently no organised, central car market in the sultanate that caters to new and used car sales. These projects will be designed as investment opportunities."

He added that the terms being offered to investors could vary considerably depending on the type of investment.

"We are welcoming all types of investors — ranging from those simply leasing out land to sub-developers all the way to mega-investors who would like to develop their concepts in Khazaen."

Mr Al Balushi said there were standard rates for different types of usage, and lease periods on offer for up to 45 years.

"Our overarching aim is to attract FDI [foreign direct investment] into the country and position Oman as a global logistic hub," he said.

According to the United Nations Council on Trade and Investment, Oman attracted $4.2 billion (Dh15.42bn) in foreign direct investment inflows in 2018, up from $2.9bn in 2017.