Transport infrastructure

An Expert's View about Sea, Coastal and Inland Water Transport in Oman

Last updated: 26 Sep 2011

Oman, located just outside Straits of Hormuz, is a natural gateway to the booming Arabian Gulf region. Its close proximity and strong synergies with markets in Africa and India and access routes to Pacific Rim markets all goes to make Oman an increasingly significant player in the transport sector in the eyes of the global trading fraternity.

Sector briefing Transport infrastructure sector in Oman Why Oman? Oman, located just outside Straits of Hormuz, Projects currently underway and planned is a natural gateway to the booming Arabian will cost well over $20 billion. Gulf region. Its close proximity and strong synergies with markets in Africa and India and access routes to Pacific Rim markets all goes to make Oman an increasingly significant player in the transport sector in the eyes of the global trading fraternity. Oman?s transport and logistics industry has seen unprecedented growth over the last decade. A large number of international organisations have started operations here with significant levels of scope and presence. Many of these arrived from neighbouring UAE as a matter of compelling business case - driven mainly by spiralling costs, saturated capacity and dwindling space. In order to realise the full potential of this See the UKTI website for general information opportunity, and driven by a need to diversify about Oman. The ?Doing business? guide its hydrocarbon based economy, Oman has includes an overview of the economy, business been organising its transport sector to fit in culture, potential opportunities and other with the needs of the rest of the world. The relevant issues. Government has introduced a massive infrastructure development programme aimed at creating world-class air, sea, rail and land transport facilities. UK Trade & Investment Sector briefing: transport infrastructure sector in Oman Oman?s transport infrastructure development Tier 3 Code F green field airports at Shaleem, programme has the core objective of becoming Haima and Adam. Airports are to be the Gulf region?s logistics and transport hub. operational during the 2012-13 timeframe. The developmental needs of road, rail, sea and air transport systems are being planned as part Musandam airport of one whole, continuously developing plan. Greenfield, International Class airport with a Following are some of the key examples. capacity to 250,000 pax a year. Master plan bids are currently under evaluation. Air Sea Muscat Airport The re-development of Oman's largest airport Duqm compr Duqm is strategically located midway between ises some 70 buildings apart from the Muscat and Salalah and is slated to become a terminal, including a control tower, an air planned township of 100,000people with world- traffic management centre, and a cargo class maritime and industrial infrastructure by terminal capable of 200,000 tons of freight 2020. annually with parking capacity for 6000 cars. It will boast 24-28 boarding air bridges, all of Maritime and industrial hub which are capable of handling new and existing Major strands of this development include a code C-F aircraft. An 80-bed airside hotel for port, airport and fishing harbour. The transfer passengers is also envisaged. When government has signed a renewable 10-year complete in 2014, this first phase will have the Management, Technology, Supply and capacity to handle 12 million passengers per Marketing contract with Daewoo Shipbuilding & annum. Marine Engineering (DSME) to develop a world- class ship repair and dry dock facility within the Salalah Airport Duqm port area. The new terminal, with a capacity to handle 1 million passengers and 100,000 tonnes of Dry dock and shipyard cargo annually will have 8 passenger boarding The first major company to be based in Duqm bridges, and parking for 1,900 vehicles. The is the Oman Dry Dock Company, which existing 3,300m runway and taxiway system started operations in mid-2010 and is expected will be upgraded to accommodate aircraft types to employ up to 3,000 people when at full such as the Airbus A380. capacity. The Japan Bank for International Cooperation provided a financing package Duqm Airport worth US$660 million for the Port and Dry RO60 million, full international sized project Dock project where total investment is designed for 500,000 passengers and 50,000 estimated to be about US$1,096 million. tonnes of cargo capable of accepting heavy lift aircraft. Work on the airport is well underway Several other local and international companies and is expected to be ready for service by late are considering projects at Duqm. 2012. Duqm Port Sohar Airport Duqm Port is a major new facility with a The project includes a Passenger and Cargo turning basin of more than 2km that will Terminal, 4km runway, a separate Air Traffic comprise the ship-repair facilities, bulk and Control Tower, Ground Service Equipment and general cargo as well as facilities for the Coast Airport Maintenance Buildings, and a Fuel Farm Guard and Royal Navy of Oman. with Fuel Hydrant System. Sohar free trade zone Ras Al Hadd Airport Sohar Industrial Port Company SIPC (50-50 $200m, Tier 2, Code F design facility to handle joint venture of the Government of Oman and around 500,000 passengers a year to be the Port of Rotterdam) has a concession to operational by 2012. develop, operate and manage a 4500-hectare free zone adjacent to the industrial port. Adam, Haima and Shaleem Freezone Sohar will be completed in five phases. Plans for an international airport and a UK Trade & Investment Sector briefing: transport infrastructure sector in Oman new rail system at Sohar will further enhance the project?s investment appeal. Consultants are also working on plans to expand Terminal 2 at a projected cost of Hasik township $525m. A new, modern coastal town is being planned at Hasik in Dhofar Governorate. The Masirah sea bridge government is strengthening road $1.5 billion project to build a 17km sea bridge communications to this remote coastal between Mahout and Masirah Island. Feasibility community, as well as exploring the feasibility Consultancy tender is expected to issue this of adding Hasik to the country?s high-speed year. passenger ferry network. Construction of a major blacktop linking Hasik Land - rail with the fishing village of Shuwaymiyah in Wilayat Shaleem wal Halaniyat in Dhofar Oman national railway Governorate has been billed as a ?strategic? The Sultanate of Oman, along with other project. members of the Gulf Co-operation Council (GCC) union is in the early stages of setting up The 95-km road will open up large swathes of its first ever railway system. The GCC railway north-eastern Dhofar Governorate to project spend over the next ten year period is development, more importantly, a fully valued at $110 billion; Oman?s share of this will asphalted alternative land route from Muscat to be $11 billion. Salalah along the coast will exist, for the first time. When completed in roughly two years The Supreme Committee for Town Planning time, the Hasik-Shuwaymiyah link will create (SCTP) has been entrusted with the task of an uninterrupted blacktop that runs from developing Oman?s first railway system. Salalah to Hasik along the coast. UKTI has identified ONR as a significant Mina Qaboos opportunity where we can help British The first modern passenger cruise terminal companies win business and has formulated a opened at Port Sultan Qaboos during 2010. long-term strategy to achieve this. More than 300,000 tourists are expected to use this port annually. Meanwhile the port The railway project is scheduled to be fully continues to be in service as the main cargo operational by 2017. At the moment we are hub for northern Oman, pending its proposed awaiting the results of a prequalification relocation either up or down along the coast. process for two major, initial tenders of this project a) for Design and Engineering and b) Shinas port Project Management. It is understood that a The MoTC has commissioned a Technical and tender announcement is imminent and a Feasibility Study to decide either on an project award is likely by June 2011. upgrade of the existing Shinas jetty or a new port in a nearby location. This will include The impact of a Gulf rail network on the Gulf identifying requirements for establishing States cannot be overstated as its contribution storage facilities, industries, commercial to all the sovereign economies will be facilities as well as a free trade zone. significant. Salalah port The $645 million master plan envisages Land ? roads expansion of container and general cargo terminals, port infrastructure and facilities to Oman?s current five year plan (FYP) period reach a total quay length of 8 km over 20 yea 2011-2015 has ear-marked over RO 1 billion rs, bringing capacity to 15m TEUs per month for expanding the country?s road system. In . Running alongside this is the addition there are several high-value road- construction of OR70m, additional 1266 metres of multi-purpose berths building projects worth nearly RO 0.5 billion , a new breakwater to underway that are due for completion in the increase capacity to 40 million TPA of dry-bulk and next 3-4 years. In addition to this, it is 5 million TPA of liquid cargo at a cost of OR70m. reasonable to expect significant amounts of The Jetty is expected to be operational by work to arise from the need to construct access end 2012. UK Trade & Investment Sector briefing: transport infrastructure sector in Oman roads, runways, internal roads etc at airports, which is part of the Diwan of the Royal Court. ports and harbours. The total FYP spend under Diwan is an independent administrative entity this head works out to over RO 3.5 billion. with its own budget and is responsible for all palace related building projects. In the interior In addition to extensive highway rehabilitation of Oman, the Ministry of Regional Municipalities work and major new roads, flyovers and & Water Resources has the responsibility for interchanges in the capital area, several major building public amenities, roads and water road-building projects are proposed or works. underway in the interior regions aimed at connecting the many outlying areas to the While the bulk of the construction work will be main trunk routes. carried out by half a dozen or so specialised local contractors, UK has a strong history of A new coastal road linking Barka, just north of being able to secure major chunks of business Muscat and Shinas near Buraimi, the Duqm from supplies and equipment and by providing road specialist services eg bridge rehabilitation, network, Ruwi Wadi Kabir Link Road, the niche area consultancy etc. The UK has a long Azaiba Interchange Wadi Adai-Al Amerat Road tradition of supplying via agents an extensive Dualisation, Dhofar-Wusta single carriage way, range of construction equipment, materials and which is an alternative land route from Muscat finishing products which includes road to Salalah are some of these. The total spend furniture, lighting and electrical supplies, on this count alone is likely to be nearly RO 0.5 surfacing, and access systems etc. billion. The marketplace Several high profile road projects have Small, niche area operators tend to take up received the green light for implementation specialised product lines and work. The country during the last five year plan that ended in relies heavily on imports and the market is 2010. Key among these is the Batinah highly competitive and promotes a Expressway project, which will serve as a new vendor/agent culture. The success of a superhighway through the Batinah region. The product, to a great extent, depends on the 275-km expressway opened to traffic in agent. Major end-users and the Omani November 2010 effectively extends the newly Commercial Law encourage vendors to engage built Muscat Expressway all the way to Oman?s a registered local agent. An amendment to the border with the UAE. The carriage way is seen Agency law has removed the requirement for as vital to realising the Batinah region?s exclusive agents. immense potential as an industrial and economic belt centred round the Sohar About a dozen or so business groups - through Industrial Port and Special Economic Zone. some 400 or so associates, divisions and The expressway project will form a key subsidiaries- dominate the market and control component for a comprehensive multi-modal the trade economy. Most large contractors transport network in the region that also have developed in-house sourcing or trading includes plans for the Sultanate?s first ever capabilities that complement their line of railway line and a modern airport in Sohar. activities. This allows them a degree of control over supply, delivery, pricing and, in general, In the Batinah region, work has already an edge over the competition. commenced on the 241-km Coastal Road. It will connect areas designated for future Consultants tourism zones or other projects of national or It is mandatory for foreign consultancy firms to strategic importance. engage a suitably qualified local partner in their respective areas of competency. In early 2010 the 90-km, Qurayyat-Sur dual carriageway was opened to traffic cutting Opportunities travel time between Muscat and the Sharqiya UK companies are positioned well to benefit region by two hours. from opportunities arising in the following areas: The Ministry of Transport and Communications is responsible for developing the road ? Infrastructure - planning, onstruction, infrastructure except in the capital area maintenance and equipment (Muscat). Within Muscat, the responsibility for civic services lies with the Muscat Municipality, UK Trade & Investment Sector briefing: transport infrastructure sector in Oman ? Specialist expertise - project Medium Sized Enterprises (SMEs) to attend management, consultancy, financing and trade shows overseas. insurance ? Capacity, capability and workforce - staff training/skill enhancement, UKTI contacts recruitment and retention Sam Oliver If you have any questions about opportunities Trade & Investment Advisor in the local market, get in touch with the British Embassy Muscat contacts listed at the end of this report. Tel: (00968) 24 609 258 E-mail: Business opportunities aimed at UK companies are added daily to the UKTI website. These leads are sourced by our staff overseas in Ian Cranshaw British Embassies, High Commissions and Dy Head of UK Trade & Investment Consulates, across all sectors and in over 100 British Embassy Muscat markets. You can search for opportunities by Tel: (00968) 24 609 240 sector or country, or register to receive E-mail: business opportunity alerts on a regular basis. Next steps - how UKTI can Major events and activities help TransOman Conference Supported by the Ministry of Transport and British companies wishing to develop their Communications, this event will be held in business in the local market are advised to October this year for the third year running. undertake as much market research and This event, which attracts considerable interest planning as possible in the UK. UKTI?s local among international transport and logistics team, with its wide local knowledge and experts, highlights the challenges of creating a experience, can provide a range of services to transport infrastructure that can easily link into British-based companies wishing to grow their the global system. business in global markets. Trade Association This can include: A co-ordinated logistic supply chain association ? Provision of market information is now being planned. ? Validated lists of agents/distributors ? Key market players or potential GCC Britain Expo customers in the local market ? Establishment of interest of such Contact: Carl Bruce, Senior Manager Middle contacts in working with you East Team ? Arranging appointments Email: ? Organise seminars or other events for Time: 30 June 2010 ? 1 July 2010 you to meet contacts and promote your company in the local market UKTI Rail Trade Mission Visit Contact: Derek Griffiths This work is available via our Overseas Market Email: Introduction Service (OMIS) a chargeable Time: Autumn 2011 (Date TBC) service which assists British-based companies wishing to enter or expand their business in overseas markets. For details of events related to this country or sector, use the events search on the UKTI To find out more about commissioning this website or register to receive regular updates. work, or accessing other UKTI services and New export events are added daily. specialist advice, please visit the UKTI website to find contact details for your local UKTI UKTI?s Tradeshow Access Programme (TAP) office. provides grant support for eligible Small & UK Trade & Investment Sector briefing: transport infrastructure sector in Oman Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. 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Posted: 26 September 2011, last updated 26 September 2011