The project, also known as Al-Madina Al-Zarqa, is located on the Al-Sawadi seafront, about 100 kilometres northwest of Muscat
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Grand Blue City Development Company (GBCD), backed by Oman’s sovereign wealth fund, the Oman Investment Authority (OIA), is preparing to commence the main construction works on its Grand Blue City project in the sultanate.
According to a notice published on the Oman Tender Board, the client issued the site demolition works tender on 13 August and set a bid submission deadline of 31 August.
It is understood that the demolition works package will prepare the site for the main construction works on the project’s first phase, which includes 100 luxury villas; 202 lagoon villas; a five-star hotel; 130 studio, one-, two- and three-bedroom serviced apartments; and 270 residential apartments.
In June last year, GBCD appointed local contractor Galfar Engineering & Contracting to carry out the marine works for its Grand Blue City project.
The contract awarded to Galfar is valued at RO12m ($31m) and is scheduled for completion over two years.
In November 2023, MEED exclusively reported that Oman had revived plans to proceed with the long-stalled Blue City project.
Egyptian architectural consultant Engineering Consultants Group is the project consultant for the first phase of the development.
The project, also known as Al-Madina Al-Zarqa, is located along the Al-Sawadi seafront, which is almost 100 kilometres (km) northwest of Muscat.
Project background
First launched in 2005, the project was led by the local Al-Sawadi Investment & Tourism Company (ASIT). In 2006, a joint venture of Greece’s Aktor and Turkiye’s Enka was awarded a $1.9bn design-and-build contract for the first phase of the Blue City development.
Project promoter ASIT, which included the local Cyclone and Bahrain-based AAJ Holdings, held a 75-year concession from the government to develop the land.
Construction began shortly after the contract award, but failed to gain momentum due to financial difficulties.
The 2008-09 financial crisis caused further investment in the project to dry up, stalling progress. As a result, the scheme became burdened with unsustainable debt and was unable to proceed.
In 2010, Dubai-based Essdar Investments made an offer to buy notes sold by the Blue City development at a discount. The company said it would pay 20% of the face value for class B1 and class C securities.
In 2012, Onyx Investments, a subsidiary of the OIA, attempted to take control of the project by offering to repurchase approximately $143m in outstanding bonds at 35 cents on the dollar.
When it was initially conceived, Blue City was expected to cover 32km and become Oman’s third-largest city, including schools, apartment buildings and villas. It was viewed as an integral part of the sultanate’s economic diversification strategy.
