Oman signs $35 mln railway consultancy deal with Italferr - ONA

DUBAI Thu Feb 6, 2014 5:13am EST

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DUBAI Feb 6 (Reuters) - Oman has signed a 13.6 million rial ($35.3 million) deal with Italferr, the Italian state railways engineering firm, for consultancy services on the initial design of its multi-billion dollar railway project, its state news agency ONA said.

A pre-qualification tender for railway construction will hopefully be launched soon, Minister of Transport and Communications Ahmed bin Mohammed al-Futaisi said in a statement carried by ONA.

"The first contractor will be awarded the actual work early in 2015," he said, adding that field preparations had started including geographic and geological surveys.

The state-funded, 2,244 kilometre (1,395 mile) rail network - the country's first - would link the desert town of Buraimi, bordering the United Arab Emirates, to six major settlements in Oman including the industrial city of Sohar and the port of Salalah, seen as the region's future gateway to Africa.

Officials have estimated the eventual cost of the project at around $15 billion. It would ultimately connect to a planned rail network across the six-nation Gulf Cooperation Council (GCC), and eventually to neighbouring Yemen.

Oman, which exports modest amounts of oil and will face challenges in financing its state budget and generating employment for its citizens in coming years, has said it expects its railway network to be fully operational by 2018.

The railway could help to diversify Oman's economy beyond oil and gas by facilitating trade and industrial projects, while increasing the geopolitical security of Gulf Arab states by giving them a major trade route bypassing the Strait of Hormuz.

($1 = 0.3851 Omani rials) (Reporting by Martin Dokoupil; Editing by Andrew Torchia)

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