A Future Logistics Hub Of The Middle East

The growth and development of Oman's transportation and logistics infrastructure has recently received a number of catalysts with the aim of building on Oman's ability to compete with other players and potentially acting as a key logistics hub in the Middle East.

While the road, air, port and rail sectors have all been prioritised for growth by the Government, it is the port sector that has benefited the most from external investment and recent political developments in the Middle East. Set out below is a description of recent activity which has taken place in the transportation sector in Oman along with key legislation that applies to certain specific sectors.

Sea

Historically, the prominence of the port at Muttrah in Muscat was acknowledged by the Greek geographer Ptolemy who saw Muscat's importance in acting as the last watering place for ships heading out of the Gulf to India, East Africa and beyond. Nowadays, the port at Muttrah is used predominantly for tourism purposes after commercial operations were relocated to Sohar.

The main commercial ports in Oman are situated in Sohar, which lies midway between Muscat and Dubai, and Salalah, which sits on the southern coast of Oman ensconced on the Arabian Sea. Readers will immediately recognise that the geographical locations of these ports offer quite different benefits to the transportation of goods by sea and these benefits were fully acknowledged when Oman was considered a pioneer in seafaring and maritime transportation during the 18th and 19th centuries. As the Government of Oman realigns various facets of its economy away from hydrocarbons, this historical feat may repeat itself with evidence in recent months highlighting that trade between Oman and Qatar has increased by 2000% since June 2017 as logistic companies continue to be attracted to Sohar.

The current major investment story in Oman is the development of the Port of Duqm which was established as a joint venture between the Government of Oman and the Consortium Antwerp of Belgium and recently attracted an $11bn investment as part of China's One Belt One Road initiative. Although very much a long term project, the opportunities at Duqm are large scale and its key advantage is that it is not positioned near the Straits of Hormuz and consequently does not suffer from the usual problems which are associated with busy trade routes.

The Sohar freezone was created by Royal Decree No. 123 of 2010 and the emergence of Sohar Port as a...