Oman's Salalah Aims for Megaport Status
The Omani port of Salalah, which is to be boosted by a free trade zone, aims to add two more berths and join the league of megaports catering for the world's biggest ships, its chief executive officer says.
Jack Helton, who signed a memorandum of understanding on the zone with the Omani government last week, told AFP that Salalah Port Services (SPS) has recommended the expansion to raise capacity to 3.5 million TEUs (20-foot equivalent units) by 2003.
The target is to join the world's top 10 in transshipment by the end of 2001 and the top 20 in total volume two years further down the road, he said, adding that the emphasis would be to address the trend toward using bigger ships.
With its four berths and nine cranes, and three more cranes on order to handle 12,000 TEU vessels, which no other port in the region can, Salalah's volume has increased to 93,000 TEUs a month, the Texan said.
The projected figures are 1.8 million TEUs for next year and 2.2 million TEUs in 2002, while the profit figure for 2000 is projected at 1.9 million rials (4.88 million dollars).
SPS posted losses of more than 9.6 million dollars in 1999, its first operational year, after taking into account start-up costs.
Turning to the free trade zone, Helton warned that the development would be slow but forecast it would lead within five years to "significant increase in import-export value through the port".
Salalah Port Free Zone Company is to be formed by end of 2000, he said, adding it would be closed stock at first but go public within three years.
SPS as project manager of the zone has a 20 percent share, the Dallas-based Hillwood as developers 40 percent, while the other 40 percent will be under Omani ownership.
The aim is to privatize within three years, with up to 100 percent private ownership, he said, admitting however that "financing is a challenge", without giving figures.
On the ground, 150,000 square metrers (more than 1.6 million square feet) in multi-purpose buildings are to be constructed by April 2001, and a free trade zone village of 5,800 homes to be developed over a 30-year period.
"It is up to the government to establish the free trade zone, amend legislation, set up a one-stop shop, and make it customer-friendly like neighboring Dubai's Jebel Ali port and free zone," he said.
Helton also regarded the southern Yemeni port of Aden, which like Salalah has a container port and free trade zone, as a competitor because of its geographic location.
But thanks to growth in demand and a recovery in rates following the end of the Asian economic crisis, "we think there's room for all of us," he said.
Helton saw the future in "bigger and bigger ships" and said that Salalah, with its huge cranes and deep-water facility, was "going for the megaships, which like 747s, go into megahubs".
"Salalah has a good chance of becoming a megahub ... if we don't screw up," he said, stressing the importance of productivity, customer friendliness and turnaround time for vessels.
SPS, which is 70 percent Omani and the rest owned by Maersk Sea Land of Denmark, operates the Salalah container port, which opened in November 1998, on the Europe-Asia shipping lanes.
Under the September 11 trade zone agreement, SPS now acts as overall port authority on behalf of the government, taking over operation of the India Ocean town's conventional cargo port – MUSCAT (AFP)
© 2000 Al Bawaba (www.albawaba.com)