Oman: Port Expansion

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Oman is undergoing a massive expansion of the country's port facilities as part of a larger programme aimed at boosting the sultanate's transport infrastructure to support trade and tourism.

On April 27, the Omani government invited bids from engineering consultants for a feasibility study on the planned development of the port of Shinas in the north in the Batinah region.

Currently, Shinas is able to serve only local trade, with shallow draft vessels using the port for small-scale agricultural, fishing and animal transshipment. Though preliminary work has already been carried out at Shinas, with a dredging project in 2002 deepening the harbour's basin to four metres, existing infrastructure precluded the loading and unloading of larger ships, thus limiting the port's usefulness.

The contract for the provision of consultancy services, which is being overseen by the ministry of transport and communicationtions, is ultimately linked to the design and construction of a new port, with the aim of developing Shinas as a trade gateway for the north of the country, as well as serving to encourage investment in the region.

Envisaged at Shinas is the development of warehousing facilities and either a free trade zone or a special trade zone to help stimulate industry in the region. Having a direct shipping outlet in the area will assist the copper mines of Shinas and nearby Hatta, which between them have an estimated 4m to 6m tonnes of extractable ore with a 2% copper content.

As one of the few Gulf states with extensive mineral resources other than oil and gas, Oman has also seen the need to build ports for the specific needs of the industries in various areas.

In this regard, there are plans for the port of Shinas to serve as a terminal for high- speed ferries running to Khasab, the Omani enclave on the Musandam Peninsula. The port will also be linked by a new coastal highway running from the port of Barka further down the Batinah coast, through the industrial port of Sohar and on to the border with the United Arab Emirates. The port of Barka has been earmarked for development into a logistics hub, with facilities large enough to handle container shipping and Customs services.

As part of a wider effort to expand transport infrastructure in and out of the wilayats, Ahmed bin Abdulnabi Macki, the national economy minister, announced on April 14 plans to build a rail line between Barka and Sohar. According to Macki, the line will be dedicated to freight, at least in its initial stages, and could be extended to the southern port of Al Duqm on the Arabian Sea. If the project goes through, it would mean that two of Oman's largest ports and industrial bases, Sohar and Al Duqm, would be linked by rail, cutting freighting costs and time spent in moving cargoes by sea.

The development of Al Duqm moved up a gear on April 29 with Omani construction firm Galfar and South Korea's Daewoo Shipbuilding being awarded a $442.2m contract for infrastructure work at the port. Under the contract, the joint venture is to carry out land reclamation work and dredging to deepen the harbour as well as build two breakwaters, two 400-metre long dry docks and a quay wall where vessels can be moored. According to the government's long term plans, Al Duqm is to become the centre of a ship building and repair industry in the region, as well as having a refinery and oil export terminal.

By spreading the country's port facilities up and down the coast, and by connecting them with a network of road and rail links, Oman hopes to spread the wealth gained through its fossil fuel industry across the country and develop a diversified economy to sustain itself in the future.

© Oxford Business Group 2008