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Oman Vision 2040 Impact on Construction Sector
Oman Vision 2040 is a long-term development roadmap that was introduced in 2020. It aims to accelerate economic diversification, elevate the quality of life and decrease dependence on oil. The Oman construction sector has been pivotal in driving these objectives. The country is investing increasingly in several major infrastructure, urban development, logistics, housing and industrial projects.
Oman is also making conscious efforts to establish itself as a competitive regional hub for trade and investment. The government is building world-class ports, airports, industrial zones and transport networks. These projects will improve connectivity and streamline the movement of goods, people and services and above all support economic growth.
Oman Vision 2040 and Construction Sector
Oman’s push for economic diversification under Vision 2040 is quite visible in its construction pipeline. Several major construction projects in Oman are driving increased investments in key construction sectors (oil & gas, industrial, buildings, power & water and infrastructure). According to the Oman Vision 2040 Implementation Follow-Up Unit, more than 100 projects have been completed in the first five years (2021-2025).
The Unit highlights major projects in health, education, tourism and infrastructure. New hospitals, clinics and schools have been built across several governorates. Development work is picking up the pace for major transport and logistics projects.
Major Transport and Logistics Projects
Dibba–Lima–Khasab Road
This road project improves connectivity to the Musandam Governorate, linking coastal communities and enhancing access to the strategically important northern region.
The route strengthens transport infrastructure for both residents and tourists visiting this scenic peninsula.
Hafeet Rail
Hafeet Rail is a cross-border freight railway connecting Oman with the UAE’s Etihad Rail network. The project will link the Port of Sohar to the broader GCC rail network, significantly enhancing logistics efficiency and reducing transportation costs.
It represents a major step toward integrated regional infrastructure under Vision 2040.
Housing and urban development
Housing and urban development are also progressing. Nearly 10,000 homes are being built under the Sorouh program. Sultan Haitham City has entered construction and will eventually accommodate around 100,000 residents. Tourism projects, including Yiti Sustainable City and the 3-km Muttrah Cable Car, are expected to open in 2026. These projects are designed to boost visitor experiences.
Sorouh Housing Program
The Sorouh program is a government initiative building nearly 10,000 homes across various governorates to address citizens’ housing needs.
It supports the social development pillar of Vision 2040 by ensuring accessible homeownership opportunities.
Sultan Haitham City
This massive urban development project will accommodate approximately 100,000 residents, making it one of Oman’s largest new city developments.
The project encompasses residential housing, commercial facilities, schools, healthcare centers, and recreational spaces.
Tourism and Sustainability Projects
Yiti Sustainable City
This integrated tourism development combines luxury hospitality, residential communities, and sustainable infrastructure along Oman’s coastline.
Expected to open in 2026, it will boost tourism revenues while showcasing sustainable development models.
Muttrah Teleferik Cable Car
This 3-kilometer cable car system will connect Muttrah Corniche with the surrounding mountains, offering panoramic views of the historic port area and Muscat’s coastline.
Expected to open in 2026, the project aims to enhance visitor experiences and promote tourism.
Renewable Energy and Environmental Initiatives
Oman’s Environment pillar has advanced sustainability through the National Strategy for Carbon Neutrality, covering 212 projects by 2025. Hydrogen Oman “Hydrom” oversees green hydrogen development, while solar and wind projects are diversifying the energy mix. Water treatment and desalination plants are further supporting resource management.
Hyport Duqm Green Hydrogen Project
This flagship project develops green hydrogen production facilities powered by renewable energy within SEZAD.
lThe initiative positions Oman as a global green hydrogen exporter, supporting energy transition goals. It attracts billions in foreign investment and creates new industrial ecosystems around clean energy.
Green Hydrogen Project in Dhofar
This major renewable energy initiative develops green hydrogen production capacity in southern Oman, leveraging the region’s renewable energy potential.
The project attracts international partnerships and positions Dhofar as an energy production hub.
Green Industry and Environmental Conservation
Green industry and tourism projects are expanding. The Green Mobility program is developing an electric transport system to cut CO2 emissions. Oman also launched the Gulf’s first ship recycling project, a clean-energy shipping facility at Sohar Port. The new dams in different governorates will support sustainability and flood protection.
Barka Waste-to-Energy Facility
This facility converts municipal solid waste into electricity, addressing both waste management challenges and energy needs.
The project supports circular economy principles and reduces landfill dependence while generating clean power. It demonstrates innovative solutions for sustainable urban development under Vision 2040.
Oman Botanic Garden
Located in A’Seeb, this is the largest botanical garden in the Arab world, housing 1,200 rare plant species native to Oman and the region.
The garden serves educational, conservation, and tourism purposes while preserving botanical heritage.
Emerging Opportunities
The Special Economic Zone at Duqm (SEZAD) is creating major construction opportunities. Its ports, airport and industrial zones are attracting investments in logistics, manufacturing and tourism. By mid-2025, committed investments in SEZAD reached US$16.4 billion (RO6.3 billion), highlighting strong private-sector confidence.
Transport and urban regeneration projects are also driving demand. Key initiatives include the Hafeet Rail link, Muscat Metro, road upgrades and mixed-use developments in urban centers. These projects improve connectivity, support trade and create opportunities for residential, commercial and infrastructure construction.
Challenges and Concerns
Oman’s construction sector faces several challenges despite the Vision 2040-driven growth. Regulatory hurdles and complex approval processes can delay project execution. Securing financing for large-scale projects remains a key concern, particularly for private-sector investors.
Supply chain disruptions and rising material costs add further pressure on timelines and budgets. At the same time, some contractors face capacity constraints, making it harder to deliver multiple large projects simultaneously. Local content requirements also require careful planning to source materials and services domestically.
Workforce skills remain a challenge. Many projects rely on specialized labor, which often needs additional training. Developing local talent while maintaining quality standards is essential for meeting Vision 2040 goals.
Implications for Stakeholders
Foreign investors and international contractors should be aware of regulatory and financing risks in Oman’s construction sector. Reportedly, Oman is reforming its real-estate laws and building codes, but bureaucratic delays and zoning inconsistencies remain a concern. FDI is rising, but a large share of construction projects are still publicly funded, making private players dependent on public-sector pipelines.
In terms of entry strategy, building partnerships with local firms is increasingly attractive. The Public Authority for Special Economic Zones (OPAZ) reported that investments in free zones rose from US$36.7 billion (RO14.12 billion) to US$57.2 billion (RO22 billion) over five years. Joint ventures or PPPs in sectors like clean energy, green hydrogen and logistics can help spread risk and win large projects. At the same time, stakeholders should monitor free-zone incentives, such as tax and customs benefits in SEZAD.
Conclusion
Oman Vision 2040 Impact on Construction Sector is visible through a dynamic pipeline of projects across housing, transport, tourism and sustainability. Major developments are shaping urban growth. They aim to improve living standards, boost connectivity and promote eco-friendly infrastructure.
Stakeholders should watch opportunities in green energy, sustainable tourism and urban regeneration as private-sector involvement grows. By 2030, these projects will accelerate modernization and by 2040, Oman aims for a diversified, resilient construction industry aligned with global standards. Connect with Ventures Onsite to gain valuable construction industry insights and explore exciting investment opportunities.
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