Logistics ranks among the three thrust areas of the Sultanate’s economic diversification programme, the other two being tourism and manufacturing. The government’s serious intent in promoting rapid growth in these key areas is evident from major changes to the regulatory framework. The government’s focus is already paying off, considering the green shoots in the economy. The leadership’s unstinted support for growth in the selected area is evident from the untiring efforts of the ministers and top officials in inspiring the right development culture.
Recently Minister of Transport and Communications Ahmed Bin Mohammed Al Futaisi toured the Sohar port premises to get a ringside view of the rapid growth that the nation is making in the key thrust area of logistics. He reviewed the work of the container terminal and general cargo terminal. His morale-boosting tour also included the handling areas and important inspection platforms. The port is an important cog in the wheel of the nation’s march as a logistics power of the region. The logistics sector was expected to contribute $12 billion to the nation’s gross domestic product last year, a 7.87 per cent increase over the previous year.
The world-class facilities at Sohar with direct access to the Sea of Oman are an important base for the nation’s push for investments estimated at $50 billion in infrastructure projects in the next 15 years of which $20 billion will be in the logistics and related sectors. No wonder that Ithraa said in a report earlier this year titled ‘Briefings form Oman on Logistics’, that the nation’s logistics sector is highly competitive and already contributed 4.9 per cent to the gross domestic product in 2015.
The deep water port of Sohar along with those in Salalah and Duqm has been effectively serving international clientele across the Gulf region, East Africa, Iran and South Asia. The report was rightly appreciative of the important role that the sector plays in meeting the goals of employment generation. The sector already employs 30,000 people, a large percentage of them nationals, and handles 3 million TEUs (twenty-foot equivalent units).
The sector holds high promise for employment generation with its capacity expected to rise to 10 million TEUs by 2020, generating 80,000 jobs. A world-calss 680km road linking Sohar with Saudi Arabia through Rub Al Khali is expected to be an efficiency multiplier by providing the interior growth centres of the region direct access to the nation’s deep water ports that are facing east. The Sultanate’s Logistics Strategy 2040 takes into account the fact that South Asian and Southeast Asian regions are expected to witness fast growth over the next few decades.
There is no doubt that the strategy is capable of catapulting the Sultanate to within the top 10 logistics hubs across the world. The Khazaen logistics city in the South Batinah Governorate with direct access to Sohar and Duqm ports is being developed with this goal in mind. The 95sqkm integrated facility is expected to be operational in a year and its progress is being watched all around the region. The logistics city will function as a regional hub for industrial and business customers to drop their cargo instead of going all the way to the ports.