Salalah central: Integrating a new maritime facility with national transport aims

Dominating both the Governorate of Dhofar – where it is the largest employer – and the regional transhipment trade, the Port of Salalah has become a strong link in developing Oman’s maritime transportation.

Location

The Port of Salalah is also evolving into a multimodal transport centre, with air, road and, soon, rail links to local and global markets. “Thanks to its strategic location at the south of the Arabian Peninsula and outside the Arabian Gulf, Salalah managed to position itself at the heart of the international logistic chain. The city remains an important centre of gravity for cargo and transhipping developments in the region,” Peter Ford, CEO of the Port of Salalah, told OBG.

The port’s location makes it ideal for pooling traffic from East Africa, the Indian subcontinent, Asia, the Gulf, the Red Sea, Europe and the Americas. With over 2.5 km of quayside and a depth of 16-18 metres, it is also by far the largest deepwater facility in the Indian Ocean,. The port also lies next to the Salalah Free Zone (SFZ), which offers major incentives to firms locating there. These include zero corporate tax for up to 30 years and the possibility of 100% foreign ownership. The SFZ offers flexibility to cargo owners, who can use onshore facilities to make adjustments to products during transhipment, a major attraction for many in the industry.

Capacity

The port’s throughput between 2006 and 2012 was encouraging. Container traffic rose from 2.39m twenty-foot equivalent units (TEUs) to an estimated 3.9m TEUs, while in bulk cargo, the rise was from 2.3m MTs to 7.02m MTs over the same six-year period. According to port data, there are over 3000 vessel calls per year, with Salalah connected directly to 54 other ports. Also, the port has a TEU capacity of 5.8m, with an 87-ha yard area. Some 25 STS gantry cranes, four mobile harbour cranes and 68 RTGs work the port, with 1187 reefer plugs, 177 terminal tractors and nine reach stackers and empty handlers.

Around 2150 people work at the port, with the port authorities also providing training and education programmes for employees, the majority of whom – 78% of the skilled employees segment – are Omani nationals. This is not the end of the story though, as the port authorities plan to continue expanding the facilities.

Plans

The Port of Salalah is run under a 30-year concession agreement signed back in 1996 between the government and APM Terminals. The Port of Salalah was then incorporated in 1997 with APM holding a 30% stake, the government 20%, institutional investors 21%, and a combination of pension funds and the general public holding the remaining share. The port is also listed on the Muscat Securities Market. As such, the port authorities have been in a strong position to continue to expand and promote Salalah over the long term.

The next stage of development, running up to 2014, should see cargo capacity increase to more than 20m MT per annum, while a new liquid bulk facility should be able to handle more than 6m MT per year. The quay length is also set to rise to 3130 metres. A new breakwater should also be tendered out within the 2012-13 period, with this boosting port security by reducing the impact of the annual Khareef (monsoon).

At the same time, the port has been getting greener and more eco-conscious. While up to now, diesel generators have been used extensively on the quaysides, an independent consultation is examining dispensing with these and switching to the gas-fired national electricity grid. The port area is also undergoing important advances, with the introduction of more onshore facilities for cruise ships – these will then begin berthing on the breakwater. Additional developments to help support logistics and small business are also expected.

There is also an expectation that in addition to the organic growth in traffic, the shift from Sultan Qaboos Port to Sohar of the capital’s industrial and commercial traffic may also have an effect in Salalah, with some trade coming south. Another expectation is that the new highways to the north outlined by the government (see overview) and eventually the new railway line (see analysis) will also require further waves of future expansion, as the multimodal nature of the port takes shape.