Logistics lead the way

Updated: Aug 5, 2019

Between 2014 and 2018, Oman’s ranking in the World Bank global Logistics Performance Index went up from 59th place to 43rd. Beyond increased investment, that improvement reflects a growing focus on integrating existing assets and capabilities to build a flexible and efficient multi-modal logistics network.

Khazaen Economic City (KEC) promises to be a hopeful step in the Sultanate of Oman’s integrationist approach towards logistics – a dovetailing of public and private sector efforts to create value-adding logistics corridors. Located in Barka, around 60 kilometres north-west of Muscat, this project includes plans to create a new free zone, logistics and industrial complex and Oman’s first ever dry port. The in-land development will cover more than 50 square kilometres and is expected to be the largest public-private partnership in Omani history.

Small & Medium Development:

The Khazaen dry port will eventually provide a vital transshipment hub for cargo moving between Sohar Port and Muscat, with transport links provided by the Batinah Expressway, Oman Rail, and the Muscat International Airport. Marafi, a subsidiary of ASYAD (a state enterprise also known as Oman Global Logistics Group) is responsible for the project which fits within ASYAD’s broader mandate to support the development of Oman towards becoming a multi-modal logistics hub. In July 2019, ASYAD published its intention to explore the commerical potential of 10 separate ports, including strategic places like Liwa towards the North, Sur in the northeast, and the island of Masirah, which also plays host to a Royal Air Force of Oman military base. The ports might one day complement the operations of Oman’s major ports, by serving market demands through import and exports, adding the possibility of diversification through tourism activities, and providing integrated logistics solutions.

In the region of Al Batinah, there are proposals to upgrade a small fishery port in the town of Suwaiq into a commercial port for small and medium-sized cargo vessels. The small port is located just 150 kilometres away from Sohar Port, which handles in excess of one million metric tons of sea cargo each week. The deep-sea port recently added a ‘Food Zone’, offering the region’s first dedicated agro bulk terminal with integrated facilities for food manufacturing, packaging and food logistics. However, as Sohar continues to grow into a major regional sea port, Suwaiq could become a smaller, lower-cost alternative. A hub for perishable goods (such as fruits and vegetables, livestock) and light manufactured goods (such as furniture, carpets and electronics). Suwaiq’s close proximity to the proposed KEC dry port in Barka, as well as the maritime access to Pakistan, India and Iran could be attractive features for traders.

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Elsewhere, construction of the 720-kilometre dual carriageway linking Adam and Thumrait continues. As of May 2019, 361 kilometres had been completed and opened for vehicles. Once completed, the road will provide a faster arterial link between Muscat and Salalah in the north and south of the country respectively. And in the far west of Oman, new trading links with the UAE could open-up as that country constructs its national rail network, linking Fujairah (on the Omani border) with Ghuweifat in the far west.

An upcoming summit, entitled ‘Oman Economic & Free Zone Summit’ to be held in October, promises to outline the strategic shifts in regional trade and the in-country developments which make the Sultanate an ideal logistics hub for potential investors. In 2018, Oman was the top location for FDI in the Gulf with $19.6 billion worth of investment. Nearly 60 percent of the 173 investment projects located in the Gulf financed by Arab entities were located in Oman. The logistics-first approach is enabling the country to leverage its core geo-strategic advantages and establish itself as the best place to invest in the Gulf.

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