Speaking with Times of Oman, Al Shuaili also said that a contract with a private consultancy to manage the rail project has also been cancelled to "avoid extra costs" but insisted that the project itself has not been cancelled. A consortium led by Spain's Tecnicas Reunidas secured a $US 149m contract for project management consultancy on the 207km first phase of the 2135km Oman network in February 2015.

"The Ministry of Transport and Communications has not cancelled the project but only delayed it as other Gulf countries have decided to stop work on the project," Al Shuaili says.

Falling oil revenues forced Etihad Rail to suspend the second phase of its national railway network, the 628km line from the Omani frontier near Al Ain to Ghweifat on the Saudi border, earlier this year. This seemingly sparked a rethink in Oman. The operations and maintenance contract for the first phase, where eight companies were in the running, along with the civil works contract, with five companies shortlisted, were expected to be awarded by the end of 2015, but both failed to materialise.

With the project stalled, Al Shuaili said there is no reason to retain its existing consultancy contract for now "to avoid falling into compensation costs." He also did not confirm when the project would be relaunched.

"Whenever the image becomes clear in other parts of the project, the ministry can assign the company to start working on it again," Al Shuaili says.

As well as the first phase, Oman was in the initial phases of planning stages two of its railway network, the 240km line from Haifait to Fahoud, which is divided into two phases: the 114km section from a junction with phase one at Haifait to Ibri, and a 126km link from Ibri to Fahoud. In addition Oman Rail prequalified more than a dozen groups from Spain, Italy, China, Turkey, Korea, Germany and France for construction contracts for the next three phases of the network which cover more than 1200km. The status of these projects is now unclear.