GATE­WAYS TO GROWTH

Oil and Gas - - EXPERT SPEAK -

Ports are be­com­ing game-chang­ers for the Sul­tanate’s long-term eco­nomic growth, with the gov­ern­ment and pol­icy mak­ers iden­ti­fy­ing the po­ten­tial of the lo­gis­tics in­dus­try to sup­plant the hy­dro­car­bon sec­tor as the na­tion’s eco­nomic main­stay. So­har, Duqm and Salalah ports are an in­te­gral part of Oman’s econ­omy. All the ports have at­tracted global at­ten­tion and are wit­ness­ing re­mark­able growth in the num­ber of ship­ping lines.

Dur­ing 2017, it han­dled about 4.8 mil­lion con­tain­ers, an in­crease of 21 per cent com­pared to 2016. The vol­ume of han­dling of gen­eral cargo in the Omani ports dur­ing the year 2017 rose to 18 mil­lion tons of cargo, an in­crease of 25 per cent over the year 2016. All these ports are de­signed to be full-fledged eco­nomic zones com­ple­mented by free zones, in­dus­trial

es­tates, air­ports, road con­nec­tiv­ity and a link to the GCC rail­way net­work in the fu­ture.

So­har is emerg­ing as one of the re­gion’s prime lo­gis­ti­cal hubs. So­har Port and Free­zone is a re­mark­able in­fra­struc­ture devel­op­ment not just for Oman, but for the en­tire re­gion.

Not only has it seen con­sis­tent year-on-year growth since it was fist es­tab­lished, at­tract­ing in­vest­ments to­tal­ing more than $25bn to-date, but also it is a key as­pect of the Oman gov­ern­ment’s na­tional lo­gis­tics strat­egy. The Port of Salalah, the largest port in Oman, con­tin­ues its ag­gres­sive fo­cus on re­tain­ing and grow­ing the ex­ist­ing busi­ness. Mean­while, the port is im­ple­ment­ing its over­all strat­egy to re­duce re­liance on the trans­ship­ment busi­ness on the con­tainer ter­mi­nal side and on lime­stone and gyp­sum ex­ports in the gen­eral cargo side.

While trans­ship­ment of con­tain­ers and han­dling of ag­gre­gates are ex­pected to form the core of the busi­ness in the near term, there are a num­ber of ini­tia­tives and pro­jects at var­i­ous stages of dis­cus­sion that will lever­age the ex­ist­ing con­nec­tiv­ity of Salalah and its lo­ca­tion and also re­duce the over­all re­liance of the trans­ship­ment busi­ness.

Con­struc­tion is in full swing at Port Duqm with the phase 1 ex­pected to be com­pleted by the end of 2019. A lot of in­fra­struc­ture devel­op­ment pro­jects are be­ing im­ple­mented in and around the port. Con­struc­tion of all the ter­mi­nals is get­ting un­der­way. They in­clude con­tainer ter­mi­nal, liq­uid ter­mi­nal, dry bulk fa­cil­i­ties, and mul­ti­pur­pose ter­mi­nal.

With rapid de­vel­op­ments tak­ing place, cou­pled with the op­ti­mal lo­ca­tion of the ports, and the Sul­tanate’s rep­u­ta­tion as a re­li­able and sta­ble busi­ness en­vi­ron­ment, ports of Oman have bright days ahead, not only as a bea­con of growth and pros­per­ity for the re­gion but as a key player in achiev­ing the eco­nomic di­ver­si­fi­ca­tion goals of the Gov­ern­ment.

Sim­i­larly, the lo­gis­tics sec­tor is be­ing po­si­tioned as a big con­trib­u­tor to the Gross Do­mes­tic Prod­uct (GDP) after hy­dro­car­bons.

Through an am­bi­tious ‘the Sul­tanate of Oman Lo­gis­tics Strat­egy (SOLS) 2040’, the gov­ern­ment of Oman is look­ing to boost in­vest­ments in its trans­port and lo­gis­tics sec­tor and dou­ble the em­ploy­ment in the sec­tor to 80,000 as well as its GDP con­tri­bu­tion to RO3bn by 2020.

Oman Global Lo­gis­tics Group (re­branded as Asyad in June 2017) was formed to con­sol­i­date state hold­ings in the coun­try’s sea­ports, free zones, and mar­itime and land trans­port com­pa­nies- will be re­spon­si­ble for im­ple­ment­ing SOLS.

Asyad has two pri­mary man­dates; the first is to max­imise re­turns on the gov­ern­ment’s in­vest­ment in ports, free­zones and trans­port com­pa­nies. Se­condly, Asyad is re­spon­si­ble for ex­e­cut­ing SOLS with the vi­sion to build a com­pet­i­tive lo­gis­tics sec­tor as an in­stru­men­tal con­trib­u­tor to the na­tional GDP. SOLS’ vi­sion will be achieved through fa­cil­i­tat­ing trade and en­hanc­ing reg­u­la­tions; build­ing world-class in­fra­struc­ture; lever­ag­ing tech­nol­ogy as a dis­rup­tive en­abler and build­ing hu­man ca­pac­ity and skills, which will not only at­tract busi­ness and in­vestors, but will also im­prove the sec­tor’s rank­ing in global in­dices such as the Lo­gis­tics Per­for­mance In­dex (LPI).

There has been re­newed fo­cus on di­ver­si­fy­ing the econ­omy, and lo­gis­tics is a sec­tor that Oman will be bank­ing on to achieve this goal. The lo­gis­tics sec­tor’s GDP con­tri­bu­tion is tar­geted at RO 3 bil­lion in 2020, up from RO 1.1 bil­lion presently. Fur­ther, it is pro­jected to rise to RO 14 bil­lion by 2040.

Oman’s strate­gic ge­o­graph­i­cal lo­ca­tion makes it unique to be­come one of the top 10 global lo­gis­tics des­ti­na­tions by the year 2040. The lo­gis­tics sec­tor al­ready em­ploys 80,000 work­ers-a goal set for achieve­ment in 2020. By 2040, this is set to in­crease to 300,000, along with a po­si­tion for Oman among the World Bank’s Top 10 Lo­gis­tics In­dex.

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