25 September 2006
The Sohar port and industrial area, often referred to as the darling of Oman's Vision 2020 economic development strategy, is soon to be complemented by large-scale port and dry dock facilities in the southern town of Duqm.
The investment in the facilities at Duqm is among the government's efforts to create the necessary infrastructure conducive to future diversification programmes.
Earlier this month, Maqbool Ali Sultan, the minister of commerce and industry, announced at a conference that diversification remains a major objective of the sultanate.
There has been a 17.8% growth in non-petroleum industry this year compared to last, amounting to 12% of GDP. This figure is set to increase considerably as the Sohar industrial projects develop. With an estimated total investment of $13bn, Sohar will include a refinery, an aluminium smelter and polypropylene plant, which together will create a significant boost to non-petroleum GDP when they come online in the next few years.
In a latest move to develop large-scale infrastructure, the government launched the competitive bidding for the first phase of the Duqm port project last week.
The first of three initial phases will involve the maritime works. Two breakwaters will be constructed, at a total length of around five kilometres. Significant dredging will be done to develop the entrance channel and the harbour basin, which will be dredged to 16 metres. Two quays will also be built, a 700-metre quay for the port facilities and a 330-metre quay for government vessels.
The second phase of the project will be the development of the landside and infrastructure facilities to be designated through a separate contract. No timeline has been given on this to date.
The third phase, the port's centre-piece, will be a ship repair facility developed by Daewoo's Shipbuilding and Marine Engineering Company (DSME) according to the agreement signed between the government and the ship builder in June 2005. The ship repair facility is expected to be among the largest in the region.
On September 24, another agreement was signed by Ahmed Macki, the minister of national economy, and Nam Sang-Tae, DSME's CEO and president, for the operation and management of the dry dock complex.
The financing will take place under the auspices of the newly formed Oman Dry Dock Company a wholly owned government entity, developed specifically for the Duqm project. Figures have not yet been announced for the cost of the different phases.
Duqm will be the fourth major port in the sultanate. The current port facilities include Port Sultan Qaboos, and the sultanate's oldest port facility, the Salalah Port, which acts as a regional hub and the Port of Sohar, launched this year and initially catering to the mega industrial projects adjacent to it. Macki said at the signing that the dry dock was one of the important strategic projects and may contribute to a new source of income for the sultanate. He added that construction for the dry dock would begin in the first quarter of 2007.
Projected to be in service by 2010, the dry dock facilities will be equipped to handle some of the biggest vessels in operation. Industry insiders have also told OBG that many more projects were being considered surrounding the Duqm port, namely a new oil refinery doubling the sultanate's existing capacity. However, this has not yet been confirmed by the relevant ministries.
A note of caution regarding the contracting of the projects was raised by a construction professional during a conversation with OBG. With the fast track growth seen in the sultanate, Sohar projects are struggling with the necessary supply of contractors, which is getting in the way of the development of some of the major industrial projects. It is not clear that current contractors will be able to meet the demand of constructing a new port and dry dock facilities.
Despite the challenges regarding contracting, 11 firms have come forward to bid for phase one, including Galfar Engineering and Contracting, Carillion Alawi and Larsen & Toubro.
The Sohar port and industrial area, often referred to as the darling of Oman's Vision 2020 economic development strategy, is soon to be complemented by large-scale port and dry dock facilities in the southern town of Duqm.
The investment in the facilities at Duqm is among the government's efforts to create the necessary infrastructure conducive to future diversification programmes.
Earlier this month, Maqbool Ali Sultan, the minister of commerce and industry, announced at a conference that diversification remains a major objective of the sultanate.
There has been a 17.8% growth in non-petroleum industry this year compared to last, amounting to 12% of GDP. This figure is set to increase considerably as the Sohar industrial projects develop. With an estimated total investment of $13bn, Sohar will include a refinery, an aluminium smelter and polypropylene plant, which together will create a significant boost to non-petroleum GDP when they come online in the next few years.
In a latest move to develop large-scale infrastructure, the government launched the competitive bidding for the first phase of the Duqm port project last week.
The first of three initial phases will involve the maritime works. Two breakwaters will be constructed, at a total length of around five kilometres. Significant dredging will be done to develop the entrance channel and the harbour basin, which will be dredged to 16 metres. Two quays will also be built, a 700-metre quay for the port facilities and a 330-metre quay for government vessels.
The second phase of the project will be the development of the landside and infrastructure facilities to be designated through a separate contract. No timeline has been given on this to date.
The third phase, the port's centre-piece, will be a ship repair facility developed by Daewoo's Shipbuilding and Marine Engineering Company (DSME) according to the agreement signed between the government and the ship builder in June 2005. The ship repair facility is expected to be among the largest in the region.
On September 24, another agreement was signed by Ahmed Macki, the minister of national economy, and Nam Sang-Tae, DSME's CEO and president, for the operation and management of the dry dock complex.
The financing will take place under the auspices of the newly formed Oman Dry Dock Company a wholly owned government entity, developed specifically for the Duqm project. Figures have not yet been announced for the cost of the different phases.
Duqm will be the fourth major port in the sultanate. The current port facilities include Port Sultan Qaboos, and the sultanate's oldest port facility, the Salalah Port, which acts as a regional hub and the Port of Sohar, launched this year and initially catering to the mega industrial projects adjacent to it. Macki said at the signing that the dry dock was one of the important strategic projects and may contribute to a new source of income for the sultanate. He added that construction for the dry dock would begin in the first quarter of 2007.
Projected to be in service by 2010, the dry dock facilities will be equipped to handle some of the biggest vessels in operation. Industry insiders have also told OBG that many more projects were being considered surrounding the Duqm port, namely a new oil refinery doubling the sultanate's existing capacity. However, this has not yet been confirmed by the relevant ministries.
A note of caution regarding the contracting of the projects was raised by a construction professional during a conversation with OBG. With the fast track growth seen in the sultanate, Sohar projects are struggling with the necessary supply of contractors, which is getting in the way of the development of some of the major industrial projects. It is not clear that current contractors will be able to meet the demand of constructing a new port and dry dock facilities.
Despite the challenges regarding contracting, 11 firms have come forward to bid for phase one, including Galfar Engineering and Contracting, Carillion Alawi and Larsen & Toubro.
© Oxford Business Group 2006
