Abstract
In December 2008, contractors were preparing their expressions of interest
(EOI) for the US$200mn
concession to construct a deepwater bulk jetty at
the Port of Sohar, Oman. The new jetty will cater for the
needs of
Brazil’s Vale mining company, which is setting up an iron ore
pellet-making facility near the
port. The jetty will service very large
ore carriers (VLOCs) and will offer Vale better access to Middle
Eastern
markets than it currently has. The Oman Observer reported that a number of
firms, from countries
including Australia, South Korea, India, Canada, and
the Netherlands, were interested in the project. The
company that wins the
contract will have to have previous experience in developing a deepwater
facility.
The contract is set to be awarded in Q209, work is scheduled to
begin in mid-2009, and the facility will
begin operations at the end of
2010. The project is being overseen by the Sohar International
Development
Company, a joint venture set up by the Omani government and the Port of
Rotterdam
Authority. The deepwater bulk jetty is to be 600m long, with one
import berth and two export berths. The
facility will have a 25m draught,
allowing it to cater for VLOCs, a vessel class that has up to a 400,000
dead weight tonnage (DWT). Vale, which the new jetty will serve, leased land
from the port in May 2008
and is developing an iron ore plant for pellet
production. The facility, coupled with the planned deepwater
jetty, will
give the Brazilian company unparalleled access to the Middle East. Brazil is
the world' s second
largest producer of iron ore, after China, and is
followed in third place by Australia. In our latest Oman
Freight Transport
Report, BMI concludes that despite the global slowdown, Oman’s maritime
cargo will
grow in tonnage terms at an annual average rate of 6.3% over
the next five years.
Various factors support this prediction. According to
our forecasts, based on oil and gas exports and
diversification of trade,
Oman’s GDP will grow by an average annual rate of 4.0% over the
2009-2013
forecast period, slower than the 5.9% average registered across
the preceding five years, but nevertheless
a reasonable rate. While this
will provide support for shipping demand, the development of Sohar and
eventually, of its sister port at Duqm, will be a clear boost. Strategically
situated along the world’s major
shipping lanes, the busy and
rapidly growing markets of Dubai, Iran, and the Indian sub-continent,
these
ports have the twin advantages of being outside the Strait of Hormuz
and inside the Gulf Co-operation
Council (GCC) customs union.
The
overall outlook for the freight business in Oman is encouraging despite the
tougher international
climate and weak near-term oil pries. By transport
mode, we expect the fastest growing to be maritime
cargo, followed by air
freight, which will expand by an annual average of 4.6%, supported by a
strong
showing from Oman Air, created after the government’s
withdrawal from Gulf Air. We estimate that
road haulage should continue to
grow marginally faster than GDP at 4.1% per annum. In total, freight will
grow by 4.3% per annum across all transport modes during the 2009-2013
forecast period.
For the 2009-2013 period, we expect the transport and
communications sector to continue outpacing the
economy as a whole. It
will achieve average annual growth of 4.2%, versus 4.0% for overall GDP.
The
total value of transport and communications GDP will rise to
US$6.65bnbn in nominal terms by 2013,
representing 9.5% of Oman’s
GDP.
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