Banking on logistics
By 2040 Oman wants to become an important hub for logistics activities linking Asia and the states on the Arabian Peninsula. Extensive investment in ports, airports, roads and a rail network is expected to create this infrastructure out of practically nothing.
The Sultanate of Oman, located at the southeastern end of the Arabian Peninsula, currently generates a large part of its income through oil and gas exports. Now the country is preparing for the day when the wells run dry. Peter Young, coordinator with and consultant to the Omani transport and communications minister Ahmed Mohammed Salem Al-Futaisi, told the ITJ during a conversation in Muscat that Oman is now diversifying its industrial base.
The transport and logistics industry has been designated as a potentially promising new industry for the country and its 3 million inhabitants. Young is based in the transport ministry’s offices in the Omani capital, whose fabulous views of the Indian Ocean give it the feel of a five-star luxury hotel.
Great plans for the year 2040
Young introduces us a 100-page tome entitled The Sultanate of Oman’s Logistics Strategy 2040. “The logistics significance of Oman, a modern and simultaneously conservative country, is based on its regional and international linkages,” he explains. Logistics is set to be developed into a new national industry with international links, which is expected to create 30,000 new jobs. The government is planning to set up duty-free trade zones and industrial development areas in the country’s major ports along its more than 2,000 km coastline.
The port of Sohar, 250 km north of Muscat, is one example. The deepsea gateway already welcomes calls from huge containerships operated by well-known shipping lines. Last year the hub handled 41 million t of goods and 331,000 teu. A new terminal, operated by Hutchison Port Holdings (HPH), has the capacity to handle another 1.5 million teu annually. The sultanate’s logistics strategy also seeks to attract international enterprises to the southern ports of Duqm and Salalah.
New gateways in the south
Over the past few years the port of Duqm and its industrial zone have been created almost out of nothing. The gateway has already had USD 4.7 billion of investment pumped into it, with another USD 5 billion set to follow by 2020. The hub, which will offer an annual capacity of 7 million teu, is expected to become operational by 2019.
The country also has a new airport, completed in 2014. Flag carrier Oman Air operates scheduled flights between Muscat and Duqm. The port of Antwerp is involved in the Duqm gateway; in Sohar, in turn, the port of Rotterdam authority plays a key support role. «We want to offer world-class logistics. Germany and the Netherlands are our models,” Young explains.
The port of Salalah is located more than 1,000 km southwest of Muscat and 260 km short of the border with Yemen. It has had a free-trade zone since 2006 and has draughted plans to invest USD 15 billion by 2028. It expects to attract logistics, trade and industrial firms. The Al-Mazyunah free-trade zone has been designed to promote exchange with Yemen.
A rail network for the entire region
The transport industry worldwide is very interested to see how a project to build a nigh-on 5,000 km rail network across the Arabian Peninsula’s deserts develops. Kuwait, Saudi Arabia, Bahrain, Qatar, the UAE and Oman are the partners. 2,000 km of tracks in two north–south main lines will connect Oman’s ports and cities, as well as its industrial development and duty-free zones in the hinterland – to its neighbours’ benefit too. Oman Rail, founded in 2014, is the project manager.