GROWTH CORRIDORS

Ports are becoming gamechangers 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 fullfledged 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-onyear 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.