The multipronged development of ports, freezones and shipping lines will attract foreign direct investment into Oman
Port development is an important part of the government’s strategy to diversify the country’s economy. The country’s three major ports – Salalah, Sohar and Duqm and adjoining industrial areas and freezones are all attracting investment as well as transshipment trade.
Of late, the government has announced a massive expansion programme for Sohar port and freezone. The expansion project called Sohar Port South envisages an additional 200 hectares of land to the port’s present capacity of 2,000 hectares.
In expansion mode
Sohar Port and Freezone has already floated a tender to select an international consultant to prepare Front End Engineering Design.
Also, plans are also afoot to further expand the container terminal at Sohar port. Oman government is working on a plan to build a large modern automated container terminal at Sohar Port, which will have a capacity to handle five million twenty-foot equivalent units (TEUs) per annum.
The basic infrastructure for the proposed terminal will be developed by the government, while the superstructure will be built by the container terminal operator – Oman International Container Terminal (OITC). The current container handling capacity of Sohar is around 2 million TEUs and the expansion will take the total container handling capacity to seven million TEUs per year, once it is ready. Apart from organic growth, the relocation of all commercial traffic from Muscat a couple of years ago is a driver for recent peaks in cargo volumes, especially in containers.
Also, work on a new agro-terminal, which will support a sugar refinery and a flour mill, has already been started. Once ready, the bulk agro-terminal will be able to handle 700,000 tonnes of grain and 1.5 million tonnes of raw sugar imports per annum. Sohar Port has several advantages due to its strategic location and its access to thickly populated countries like India and Pakistan.
Sohar Port’s industrial area has attracted investment of more than $25 billion so far. The whole industrial area is divided into several clusters, including logistics, metal, mineral, petrochemical and utilities.
Development of ports
Apart from Sohar Port and Freezone, the government is keen to develop three other ports – Muscat, Duqm and Salalah. All these expansion programmes are aimed at repositioning the country as a major transshipment hub, besides attracting investment from within the country and outside.
The first phase of redevelopment of Muscat port has already been launched to make it an exclusive tourism port, which will have cruise terminals and waterfront projects. Phase one of the integrated mixed-use waterfront destination is projected to be completed by 2020, and will transform the current commercial Port Sultan Qaboos area into a major tourism-based development, spanning 64-hectares area. The Mina Al Sultan Qaboos Waterfront will include business and residential zones, destination mall, six hotels (including three, four and five-star hotels), recreation amenities and docking facilities for cruise liners and yachts.
The development will take place over four separate phases. The master development plan was conceptualised in 2015, with significant inputs received from private sector investors, who are keen to capitalise on the tourism and hospitality opportunities presented by the mega waterfront scheme.
Of late, all remaining major works of Duqm port has been awarded to contracting firms for completion within three years. These projects include a major liquid berth, container terminal, main port office building, gates, and associated facilities. As many as four terminals will be built, including two container facilities, with a quay length of 1,600 meters, capable of handling up to 3.5 million twenty-foot equivalent units (TEUs) a year. The project also includes a dry bulk terminal with a capacity of around 5 million tonnes a year and a multi-purpose terminal to handle 800,000 tonnes per annum.
Duqm port, which partially started operation few years ago, has a 2.2-kilometre-long commercial quay. The commercial quay is divided into three main areas – 300 metres of cargo terminal, 1.6-km of container terminal and 300 metres for a break bulk terminal.The complete work for a fully-fledged operation of the port is expected sometime early 2020.
Salalah port, the largest container terminal and transshipment hub in Oman, also plans to expand its capacity to meet the long-term demand.
The Sultanate’s government is also developing eight more fishing harbours of varying sizes with a sizable investment as part of a comprehensive plan to strengthen the fisheries sector. As per the plan, as many as 30 fishing harbours or ports are expected to be operational by 2020, against 20 such harbours now.
The government has already completed Barka fishing harbour while two other harbours – Al Musanna and Liwa – are under construction and are in an advanced stage of completion. Several existing fishing harbours, including Dibba, Mirbath and Khabura, will be modernised or upgraded to help fishermen across the country. The Sultanate’s fish catch, including production through aquaculture, is expected to touch 500,000 tonnes per annum by 2020, from 270,000 tonnes of fish in 2015.
Oman, with a long coastal line of 3,262 km, has a great potential to develop the fisheries sector to serve global markets. Fisheries sector is one of the promising sectors in diversifying sources of national income, creating job opportunities and ensuring high value-added products. The government expects fishermen to acquire 500 more fishing boats of varying sizes in the next three to four years. As of now, the fishermen in the country have more than 20,000 fishing boats.
Apart from developing port facilities, the government is also keen to build a strong national shipping line. The state-owned Oman Shipping Company (OSC) plans to acquire two container vessels to replace its current chartered ships.
Oman Shipping Company (OSC) is looking for second-hand vessels, each with a capacity of 3,000 twenty-foot equivalent units (TEUs). OSC has a liner vessel (Gulf Express), which is operated between Sohar and Jebel Ali, and touches the Khorfakkan and Sharjah ports. Another container shipping service (Oman Express) connects Jebel Ali, Sohar, Duqm and Salalah and goes back to Jebel Ali. The shipping company has succeeded in strengthening its position in the maritime transport markets over the past few years. Oman Shipping Company has a fleet of 51 vessels, which have a combined capacity of 8 million deadweight tonnes (DWT) now.
Oman Ship Management Company, a wholly-owned subsidiary of Oman Shipping Company, manages 39 vessels of the parent company at present. These are a mix of high-tech fleet spanning a diverse range of VLCCs, LNG carriers, product tankers, multi-purpose vessels, very large ore carriers and container ships. Starting with LNG transportation, Oman Shipping’s expansion was very fast-paced and broad-based and aimed to cater to the needs of Oman’s oil and gas, petrochemical and other industries.