PHOTO
26 October 2016
Conrad Prabhu
Muscat - Port Services Corporation (PSC), which operates and manages Muscat’s Mina Sultan Qaboos, says it has declined an offer from the government to extend the current operatorship license for an additional year. Instead, it is going ahead with a decision to convene an Extraordinary General Meeting (EGM) of company shareholders, scheduled to take place on November 7, 2016, seeking the liquidation of the 30-year-old public joint stock company.
The developments, set out in the Chairman’s Report of PSC’s financial results for the nine months ended September 30, 2016 published yesterday, are the latest in a back and forth between the Corporation and the Ministry of Transport and Communications (MoTC) over the future role of PSC in the operation of the Mina Sultan Qaboos post its conversion into a tourism and lifestyle destination.
According to Mohammed Jawad bin Hassan bin Suleiman, Chairman of PSC’s Board of Directors, a letter from the Ministry offering a 12-month extension beyond the current year-end validity of the license, was accepted by the Corporation. Acceptance was conditional upon on all of the port’s nine berths, among other facilities, being placed at PSC’s disposal, he said.
However, in a follow-up letter from the Ministry, the number of berths allocated to PSC was truncated to five – a reduction the Board deemed would adversely impact the port’s economic viability, while also generating inadequate returns to shareholders. In response, the Board resolved to seek shareholder approval of its recommendation to liquidate the corporation instead.
According to analysts, the disagreement stems from a recent decision by the government to hand over Muscat Port’s waterfront assets to Omran, the wholly government owned tourism investment vehicle, for the implementation of the ambitious Mina Sultan Qaboos Waterfront Project.
Omran’s vision to transform the port into a lavish waterfront destination means that some of the berths will be the subject of an extensive makeover and thus off-limits to ships calling at Muscat.
The Mina Sultan Qaboos Waterfront Project, which targets an estimated RO 500 million in investments, will feature as many as seven luxurious hotels, 450 retail shops, around 900 residential units, and scores of attractions designed to transform the Muttrah waterfront into a year-round tourism and leisure destination.
However, any reduction in the number of berths thus allocated to PSC will erode its earnings, the Corporation has warned. Following the relocation of most commercial cargo to Sohar Port two years ago, PSC is presently left with only a limited number of vessel types calling at Muscat. The list includes cruise and passenger vessels, bulk grain vessels, bitumen vessels, vegetable oil vessels, cement vessels, livestock vessels, and visiting naval vessels.
Despite the dramatic decline in vessel calls and cargo throughput at Muscat, net profit for the nine months ended September 30, 2016 soared 185 per cent to RO 1.829 million versus a net loss of RO 2.156 million for the same period of last year. Contributing to the increase was a hike in port tariffs that came into effect at the start of the year, as well as a jump in cruise vessel calls.
Conrad Prabhu
Muscat - Port Services Corporation (PSC), which operates and manages Muscat’s Mina Sultan Qaboos, says it has declined an offer from the government to extend the current operatorship license for an additional year. Instead, it is going ahead with a decision to convene an Extraordinary General Meeting (EGM) of company shareholders, scheduled to take place on November 7, 2016, seeking the liquidation of the 30-year-old public joint stock company.
The developments, set out in the Chairman’s Report of PSC’s financial results for the nine months ended September 30, 2016 published yesterday, are the latest in a back and forth between the Corporation and the Ministry of Transport and Communications (MoTC) over the future role of PSC in the operation of the Mina Sultan Qaboos post its conversion into a tourism and lifestyle destination.
According to Mohammed Jawad bin Hassan bin Suleiman, Chairman of PSC’s Board of Directors, a letter from the Ministry offering a 12-month extension beyond the current year-end validity of the license, was accepted by the Corporation. Acceptance was conditional upon on all of the port’s nine berths, among other facilities, being placed at PSC’s disposal, he said.
However, in a follow-up letter from the Ministry, the number of berths allocated to PSC was truncated to five – a reduction the Board deemed would adversely impact the port’s economic viability, while also generating inadequate returns to shareholders. In response, the Board resolved to seek shareholder approval of its recommendation to liquidate the corporation instead.
According to analysts, the disagreement stems from a recent decision by the government to hand over Muscat Port’s waterfront assets to Omran, the wholly government owned tourism investment vehicle, for the implementation of the ambitious Mina Sultan Qaboos Waterfront Project.
Omran’s vision to transform the port into a lavish waterfront destination means that some of the berths will be the subject of an extensive makeover and thus off-limits to ships calling at Muscat.
The Mina Sultan Qaboos Waterfront Project, which targets an estimated RO 500 million in investments, will feature as many as seven luxurious hotels, 450 retail shops, around 900 residential units, and scores of attractions designed to transform the Muttrah waterfront into a year-round tourism and leisure destination.
However, any reduction in the number of berths thus allocated to PSC will erode its earnings, the Corporation has warned. Following the relocation of most commercial cargo to Sohar Port two years ago, PSC is presently left with only a limited number of vessel types calling at Muscat. The list includes cruise and passenger vessels, bulk grain vessels, bitumen vessels, vegetable oil vessels, cement vessels, livestock vessels, and visiting naval vessels.
Despite the dramatic decline in vessel calls and cargo throughput at Muscat, net profit for the nine months ended September 30, 2016 soared 185 per cent to RO 1.829 million versus a net loss of RO 2.156 million for the same period of last year. Contributing to the increase was a hike in port tariffs that came into effect at the start of the year, as well as a jump in cruise vessel calls.
© Oman Daily Observer 2016
