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Moving towards a fully integrated transport system

Interview - July 14, 2014
Oman’s Minister of Transport and Communications Dr. Ahmed Mohammed Salem Al-Futaisi talks to United World about how the country is leveraging its geostrategic position by building 6 new ports, as well as roads, railways, airports and industrial free zones in order to create fully integrated transport and a strong logistic and supply chain system.
The sultanate of Oman is experiencing a great moment in its development for sustained GDP growth, during the last 20 years the country has emerged as an attractive destination for foreign investment due to its free market system, stable macro economic environment and political stability under the guidance of his Majesty, Sultan Qaboos. I would like to ask you in short words, what is the recipe for success in Oman in the last few years?

I think Oman is strongly realizing its strategic location to link the west and east not only the political side but also the commercial side and world trades which is why we are really focussing in developing our ports to be major economic hubs not only for Oman but for the entire world to benefit from this geographic location and as a result we are building 6 ports, at the same time, 3 of them, namely Salalah, Duqm and Sohar are built as economic zones. This will include inside the port, the airport, the industrial zone and the free zone integrated with each other so I would say we are really starting to pay attention to build a strategy for an integrated transport and improving the logistics for the country. We have been for years building roads, building airports and ports individually, but it is time to look strategically how to integrate all of these transport systems together and build a strong logistic and supply chain system in the country. As I said, building such ports in such strategic locations will require more effort in supplying them and the infrastructure required because the strategic location itself is not enough. We need to enforce that with a strong infrastructure as a second step to benefit from the location and once the infrastructure is complete, we have to go to the third important step which is improving the soft part which will be the legislations, regulations, the ICT – the systems that ease the trade for them. So, these are the ways forward, we are looking for improving the infrastructure, improving the regulatory power and bodies for the country for transport systems, and also build a unified ICT system for easing the transport and transactions and these things. Only with such vision that we have we can really play an even bigger role in the world in transport and logistics.

You have just mentioned the integrated strategy that you are carrying on to improve the transportation sector. We know that since you became Minister, the focus was on the road network as you mentioned before but I would like to know from now on what will be the priorities for the government in the short term and in the long term.

Well, we have now introduced the railway project and this is a project which is part of the development of the GCC countries and we think that this project will be a game changer in the whole logistic system in the region and what we did we put our vision around integrating this railway project with our ports and we put a priority and incorporated a vision that Oman becomes a gateway to the region from this project so by benefitting from the ports that we have and linking the railway project with the ports and building airports nearby these railway stations so we have a system in the same vicinity – a port, railway station and air cargo nearby so that you will have an easy access inside the Gulf to all the GCC countries. Since we are facing the Indian ocean we have easy access to the Indian ocean countries and also we are in the vicinity of Africa so that you can see the accessibility is very high for goods to be transferred by sea, by road and by the railway, by air – all these types of transport will be available in the country as we develop what we are doing now.

Regarding the railway transport, Oman has created the Omani National railway authority and I would like to ask you a bit more about this institution because we are trying to find out more. It is under your Ministry, perhaps you could explain a bit more about how this institution will work.

It’s not a railway authority, it’s a railway company and we called it Oman Rail Company and as you know, traditionally all transport projects are done by the Ministry but since this project is very huge, we thought it would be difficult to be run by a directorate or department within the Ministry so what we did, we created a separate company to take care of the whole railway project from the construction side, awarding tenders, the development of the operators that we will have, development of the construction companies - so their main role will be to develop the railway project in terms of construction, selecting the operators, promoting the project, marketing the project, they will do the entire railway development and in parallel, we have initiated a directorate within the Ministry to look at the regulatory part and we’re hoping that once it’s developed, it will also be separated from the Ministry to be a regulatory authority for the railway project. It is still under an evaluation process but we believe that eventually, we will create an authority to look at the regulatory part giving the licences, checking the safety aspects, all things related to regulating this sector. So, in summary, the Ministry of Transport will look at the policies regarding the railway, the Oman Rail Company will look at construction and development of this project and maybe in the future an authority will look at the regulatory parts, so we’re trying to separate the roles here.

Regarding the air and transport systems, there has been an upgrade with 6 different airports in the country and we have seen the new terminal being built here in Muscat which is an impressive new terminal – we would like to know what is the state of the works and the timings and we would also like to know what is being carried on with the national carrier Oman Air with many new aircraft being bought.

Well, in terms of aviation, you have rightly said that we are developing 5 airports at one go, two of them, Salalah and Muscat are very major projects, you might say mega-projects, the other three are regional airports in Duqm, Sohar and Ras Al Hadd. All contracts for the airport projects have been awarded, therefore they are now under construction. The last two that we awarded in Muscat was the catering building and the cargo building, the maintenance building and hangers also the terminal building infrastructure so I would say that we have successfully awarded all the required tenders for the projects. Some of the construction for the Muscat airport has been divided into almost 11 packages and their progress is varying – some packages are nearing completion, the infrastructure and civil work, which includes the runways, roads and bridges, water supply, the electricity it is very close to completion, almost 85%. The second package, the tower, air traffic control, management, the air traffic control centre is almost at 95%. Our terminal building has a delay. It was supposed to finish end of 2014 however, this project is now in delay and the main reason we were exporting big steel for frames being constructed in Turkey and the ship sank so it delayed the construction. So what will happen, we are planning to open in phases - this year, phase one will include the runway and tower and the air traffic control of the airport so I hope that airplanes will land on the new runway under the new air traffic system that we are using for the first time in the country. However, the passenger terminal building (PTB) will be delayed. We don’t have a clear program from the contractor regarding when we are going to finish – we are still evaluating, as soon as we have a clear picture, we will announce it to the people. But, we are learning from international experience that opening airports is a complex process and always has problems and difficulties due to the complexity, the number of stakeholders involved, surprises and accidents so we were expecting difficulties in this. There is pressure on the existing one, running at over-capacity right now – we are reaching 8 million passengers annually so we are required to speed up to make the new terminal available. Salalah has advanced in better shape, almost at 80% completion for the entire project. Muscat is around 67% for the entire project. We are trying very hard to open Salalah this year as a whole airport but we are not sure. It is a challenge and we are trying.

What will be first step after the opening of the big international airport here in Muscat?

Also what we are looking at this year, is opening the aviation sector for private investments. We will give at least one license to a low cost carrier. The national carrier has been the only one in the country for a long time but we are hoping this year to give one licence for a low cost or economic carrier and we will give some other licences for helicopters and some other aviation services, so that’s one new development in the sector. We are also studying the “open sky” policy to be implemented in Oman, maybe you know recently we signed the “open-skies” policy between Oman and the USA and we are looking for this policy to be agreed with other countries and as I said we are developing the airports and Oman Air is adding more airplanes to their fleet. The new airport is quite big in terms of size, very modern but we kept the Omani signature there using local materials – it will be impressive.

I would like to ask you about another major project which is the transformation of Sultan Qaboos port into a tourist hub; we believe it will attract more tourists from the sea and we would like to know what are the plans for this transformation and the expectations of the Ministry.

We have actually finished the master plan for the new look of Muscat Port, we think it is one of the most beautiful spots in Muscat with a mixture of ocean and mountains, it is quite unique. However the commercial activities there with the containers, the lift is not matching with the beauty. Also, commercially, they cannot expand because of the limited area over there. So, we have made a major decision of shifting all the commercial activity to a nearby port, Sohar port and developing the whole area that will be available after removing the commercial activity to waterfront development and also tourism ports so it will not only attract more cruise ships and tourists but we are also planning it for the locals to have a very nice destination with shops, coffee shops, restaurants, hotels nearby. We will develop the whole cornice area there so people will be excited to see this development. However, the shifting itself it has challenges. It is not easy but we are working on it, we have made a deadline for this shift which is August 31st to have no more container cargo or goods to come through Sultan Qaboos Port and another 3 months for cleaning the place and from January 2015 it becomes a tourist port. We are now looking at establishing a development company to take care and develop the entire site so basically it will not be developed by the Ministry of Transport but by a special company, probably a strategic partner who is known for port tourism development and they will start developing. It will be a beautiful place for people to enjoy as we are restoring the beauty of Muttrah.

Allow me to ask you about a major sector which is the communications sector, driving growth and other sectors of the economy. How could you briefly explain your e-governance initiative and how are you working to establish a legal framework that will enhance this sector in the future?

Actually a major thing that we have done in 2013 is developing a national strategy for broadband development in the country which is the development of the internet. The broadband strategy has been fully discussed in the Cabinet and been approved. It’s a very ambitious strategy for the next 10 years to improve broadband in the country which will cost around half a billion Rial Omani for the whole strategy. The strategy is based on providing targets - providing major cities with fibre to the home, fibre to the buildings, especially the government buildings for improving the 4G and LTE mobile internet for most of Oman and for those areas which are very remote, we will provide internet through satellite services. So, it is a kind of strategy to provide at least basic broadband of more than 10 megabits using mixed technologies for fibre, mobile and satellite to provide internet to the country. For implementing that strategy, we created another specialized Omani company, called Oman Broadband Company, it is under establishment and it has been registered and we have assigned a CEO for it and he will be responsible for developing this company. It will not be an operator providing service to the people but it will be a telecom infrastructure company which will sell wholesale to the current operators.

The company will be in charge also of spreading this infrastructure to the remote areas.

Yes, so this is a major development for 2013 that the country put a national broadband strategy and approved it and also established a company to take care of implementing this strategy. And there are major opportunities for companies to develop.

What are the major opportunities for American investors in the ICT sector in your opinion?

I think opportunities for the next maybe 10-15 years are tremendous in Oman. Railway project, I think billions of Rials, this broadband project, the airports are almost completed, roads are always on as a we are busy in infrastructure for many years to come and we advise and welcome American companies to benefit from such development in the country but also transfer their knowledge and know-how to Oman. Growth in Oman is always very steady, we don’t go very steep and collapse or anything but Oman always goes steady which gives more comfort to investors so their growth is long term. Oman has a very transparent system, we don’t prefer certain countries, we always have a tender board and everything goes through them, we transparently announce them, we open the bids and announce who has won it, so we are really proud and it’s a requirement for people coming here, so I advise American companies to take the opportunity and put their attention to Oman for this major development in the coming years. I would add to that the people of Oman have a very friendly nature and so it is very comfortable for families and individuals in the country.

United World: I would like to ask you a last question, a little bit more personal. A writer once said that the best way to predict the future is by creating it. In that sense, how do you see it, the transformation of the transportation and communication sector, not as a Minister but an individual?

I think now for many years, Oman has relied on oil as a main sector for economic development but I believe that in the future that transport and logistics will be one of the economic sectors that the country can rely on to be one of the replacements for the oil. I can clearly see with the current level of development of the ports on international levels linking the railway to the GCC countries and developing the airports, I think we are going a long way to develop a strong sector. Transport and logistics can have great econ benefits and can be one of the replacements for the oil sector. It’s not yet here but I am very confident and can see this happening soon.