Build-transfer-operate model for old airport terminal project
Expressions of Interest (EOI) for the redevelopment of the old terminal of Muscat International Airport at Al Seeb are due in by tomorrow, July 9, 2024, marking a key milestone in a competitive tender floated by Oman Airports for this prestigious project.
According to Oman Airports — part of Oman Investment Authority (OIA) — the successful bidder will be awarded a contract to design, finance, build, transfer and operate the project on a Build-transfer-operate (BTO) basis.
The contract period will be not less than 20 - 25 years, inclusive of the construction phase, to ensure the commercial viability of the project.
Envisioned for redevelopment is a gross floor area of 50,000 m2 that currently houses, among other components, the old Seeb Airport Terminal, which served as Oman’s primary gateway for commercial air traffic for 45 years until 2018, when the new Muscat International Airport was launched.
As part of the redevelopment, interested developers are invited to transform the site into an upscale mixed-use commercial hub featuring, among other components, retail and F&B elements, business hub and multi-level car park. An aviation museum is proposed as well.
According to Oman Airports, the selected bidder may form a Special Purpose Vehicle (SPV) to oversee the project’s complete lifecycle, from design and construction to operation and maintenance.
Under the BTO framework, the selected SPV will design, finance, construct and transfer the asset to Oman Airports post-construction, which will be followed by a long-term operational period.
To recoup its investment in the redevelopment, the SPV will have the right to collect revenues generated from the commercial activities within the development.
A revenue-sharing mechanism envisions part of the revenues retained by the SPV, with the rest shared with Oman Airports.
Alternatively, a fixed facility fee for the entire leasing term may be proposed by Oman Airports.
In underscoring the project’s investment appeal, Oman Airports has highlighted the site’s favourable location in the heart of Airport Heights, a rapidly urbanising suburb of the capital city.
Its proximity to the city’s main landmarks, including hotels, new airport, shopping malls, and Oman Convention and Exhibition Centre, is also a distinctive advantage.
Commercial traffic to the new development is assured not only by its excellent connectivity with Sultan Qaboos Highway and Muscat Expressway, but also by a proposed metro line that will have one of its main stops constructed right in front of the old terminal.
On June 30, Oman Airports hosted representatives from prospective developers on a tour of the Seeb Airport Terminal site.
According to a timeline of the tendering process, the results of the EOI submissions are anticipated tentatively by July 20, 2024, with a Request for Proposals (RFP) slated for release sometime early next month.