Oman smart city projects face pushback on heritage

June 4, 2025, 3:04 PM

Music at Nizwa fort. Oman is spending $15bn on smart cities but critics say tourists are attracted to Oman by its tradition and heritage

$15bn investment in smart cities
Unease over pace of urban plans
Counter to traditional tourist appeal

Oman may be investing more than $15 billion in developing digitally smart urban areas but critics say the ambition could contravene the country’s heritage priorities.

The sultanate has mobilised urban plans that could cost more than $15 billion, starting with Sultan Haitham City, work on which is in full swing on the outskirts of the capital, Muscat.

Combined, these developments are designed to use digital technology and data to enhance the quality of life for residents, improve the efficiency of service and promote sustainable development.

Spread over nearly 15 million square metres, an area the size of Manhattan, Sultan Haitham City will have 20,000 residential units in 19 integrated residential neighbourhoods.

Two more smart urban areas are planned at the southern town of Salalah, with total investments of $450 million.

“We pride ourselves with a rich heritage and centuries old cultures,” Qais Al Saifi, director of Heritage Tours, tells AGBI. “These rapid urbanisation programs will definitely go against it.”

Oman needs to draw a line and not go “full throttle” with these developments, he says.

Smart cities are part of Oman’s 2040 Economic Vision, a strategy to diversify the country’s sources of income away from oil and create more business and investment opportunities.

A fourth smart urban area is planned at Jebel Akhdar, about 170 kilometres southwest of Muscat, and a fifth, called Thuraya, in central Muscat. These will be low carbon areas, powered with renewable energy.

Saudi Arabia’s Dar Al Arkan Real Estate Development is also expanding its $4 billion luxury gated community project in the Yiti area of Muscat, where the Trump Organisation is building a golf course.

“I worked in Oman for three decades and I am now retired here,” says Ian Philip, a British resident in Muscat. “Because it is unlike Dubai, where there are hardly any heritage sites left.”

Tourists do not come to Oman for modern trappings but for its history and culture, he says.

Oman gets about three million tourists annually but, as part of its 2040 strategy, it has ambitions to increase this number to 16 million by then. In a symposium during Oman Sustainability Week last month, the minister of housing and urban developments said that smart cities would create jobs and diversify the economy.

“Investments generated from smart cities will offer employment to graduates and provide fresh injections of cash to the country,” Khalfan Shuaili told delegates of the symposium.

In the past 15 years Oman’s population has increased by more than a quarter to about five million, placing a strain on graduate job creation, according to the National Center for Statistical Information (NCSI).

Today there are about 50,000 graduates seeking employment in the sultanate each year.

Like other Gulf countries, Oman relies heavily on energy income to sustain its economy. However, the recent decline in international oil prices led to a deficit of OR136 million ($352 million) for the first three months of this year and borrowing to cover the shortfall.

Total government debt stands at $37 billion, according to a ministry of finance quarterly report in March.

The ministry says that the government will need to borrow $6.4 billion this year to balance the 2025 budget.

“We need to promote our heritage more to get a bigger number of tourists and not go flat out on smart cities and push back our culture and history,” says Asma Al Harthi, a graduate of tourism from Oman Tourism College.

“Tourism will diversify the economy and create more jobs.”