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Viewing cable 06MUSCAT993, TRANSPORT AND COMMUNICATION MINISTER SETS SIGHTS

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Reference ID Created Released Classification Origin
06MUSCAT993 2006-06-20 05:39 2011-08-26 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Muscat
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 MUSCAT 000993 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EB/CBA, EB/CIP, EB/TRA 
COMMERCE FOR ITA (C.OBERG) 
 
E.O. 12958: N/A 
TAGS: ECON BEXP EAIR ECPS ELTN MU
SUBJECT: TRANSPORT AND COMMUNICATION MINISTER SETS SIGHTS 
ON ECONOMIC EXPANSION, LIBERALIZATION 
 
REF: A. MUSCAT 990 
     B. MUSCAT 896 
     C. MUSCAT 881 
 
1. (U) Contains business proprietary information - please 
protect. 
 
------- 
Summary 
------- 
 
2. (SBU) The Ambassador called upon the Transport and 
Communications Minister to review recent developments in the 
sectors and to advocate for Gulf Air's purchase of Boeing 
aircraft (ref A).  The Minister expressed full support for 
further telecom liberalization and Oman's two-airline 
strategy.  Railway plans are under review, and the Minister 
expressed his desire to see greater U.S. company 
participation on project tenders.  End Summary. 
 
------------------------------------ 
Commitment to Telecom Liberalization 
------------------------------------ 
 
3. (U) On June 18, the Ambassador paid an introductory call 
to Transportation and Communications Minister Sheikh Mohammed 
bin Abdullah al-Harthi to review recent developments in the 
Minister's portfolio.  Al-Harthi reiterated the government's 
commitment to liberalize the telecom sector.  He remarked 
that the private sector would best meet the growing telecom 
needs of the Sultanate in a quickly changing technology 
market, evidenced by the success of the second mobile license 
issued in 2004.  He predicted that Oman would liberalize its 
value-added services sector within the next few months, and 
noted that a consultant is evaluating a tender proposal for a 
second fixed-line operating license. 
 
---------------------- 
Airlines Good for Oman 
---------------------- 
 
4. (SBU) Taking a big picture perspective on the impact 
airlines have on the economy, al-Harthi endorsed Oman's 
two-carrier strategy.  He explained that regional carrier 
Oman Air was essential in providing both domestic and 
regional service.  He was pleased that Oman Air turned a 
profit and paid out dividends last year, but he took a 
cautious view toward its future performance, noting "let's 
see what happens." 
 
5. (SBU) Al-Harthi also expressed continued support for Gulf 
Air.  Though the airline has been a financial "drain" over 
the years, al-Harthi said that the government looks at the 
bigger economic benefits that the carrier brings to Oman.  He 
cited air links to Europe and Asia, employment opportunities, 
and purchasing of goods and services as benefits that Gulf 
Air brings to Oman.  For this reason, al-Harthi commented 
that the government committed itself to bankrolling Gulf Air 
for the next three years by recently approving its business 
plan. 
 
6. (SBU) Al-Harthi further considered the growth of "national 
identity" airlines, such as Emirates, Etihad, and Qatar 
Airways, as indicators that the promotional value of an 
airline may sometimes outweigh operating performance.  He 
doubted that Dubai could have grown as much as it already had 
without the assistance of Emirates Airlines.  In the same 
light, al-Harthi is hopeful that Gulf Air, now down to two 
partner nations, would be able to do the same for Oman and 
Bahrain.  Going forward, al-Harthi hopes that Gulf Air will 
replicate Emirates' expansion beyond air services into 
hotels, duty-free retail, catering, and car rentals. 
 
----------------------- 
Working on the Railroad 
----------------------- 
 
7. (U) In discussion of the extensive developments in the 
port and road networks, al-Harthi raised the government's 
interest in the GCC railway project.  He views the proposed 
rail network as an opportunity to connect Oman's ports with 
its upper Gulf neighbors, providing shippers the opportunity 
to move goods through the Gulf without incurring the added 
costs of passing through the Strait of Hormuz.  He said that 
the GCC has contracted with a consultant to determine the 
feasibility of rail networks in GCC countries and Yemen, 
projecting that it would have to have dual use 
(passenger/cargo) capabilities in order to be viable. 
 
----------------------- 
U.S. Consultants Wanted 
----------------------- 
 
8. (SBU) Al-Harthi wants to see more American consultancy and 
contracting firms participating in Omani tenders.  Critical 
of the quality of work currently being done, al-Harthi noted 
that Oman needed the international expertise that large-scale 
projects such as the Muscat Seeb airport expansion demanded. 
He pointed out that because tenders come quickly, with some 
requesting proposals in a 4-6 week time frame, American 
companies would have to be patient and willing to build up a 
presence in Oman.  He highlighted Parsons International as a 
U.S.-based company that has been able to gradually elevate 
its stature to the point where it is now a significant 
player. 
GRAPPO