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Full steam ahead for port development

Interview - March 23, 2012
Mr Peter Broers, CEO of the Port of Duqm Company, discusses the project being developed in Duqm – the biggest of its kind in the history of Oman. Its is intended to help diversify the economy, create employment opportunities for the Omanis, encourage foreign and local investment, and to promote technology and knowledge transfer

Can you comment on the significance of the Special Economic Zone at Duqm for the economic development of Oman?

Once the development at Al Duqm is completed, it will be one of the largest economic zones in the region. Located in the center of Oman, it is well-placed as it is very close to the oil and gas fields. For example, the center of the oil & gas fields, Hayma is about 200km from Duqm. So Duqm will become the main point of entry and exit for the oil and gas activities in the central part of Oman. For that purpose, it is necessary to develop a port and an airport, as well as an area where these products can be transferred for downstream activities. Duqm is well-located for that, on top it is on one of the main cargo routes for the ships.

The project has been started from scratch, which creates a great opportunity to develop in a comprehensive way, using the lessons from other similar projects. An important hinterland is already available, because there are many activities from Petroleum Development Oman (PDO) and BP in that area. The gas and petroleum products coming out of the fields will be handled in Duqm. Gas will be used to encourage industrial development, while the petroleum products will be used in the refinery which is coming up soon. The refinery will then feed the downstream industries possibly till the production of plastic pellets and other different applications.

One of the issues that we are facing in Duqm is getting the people there, and for that reason the government is focused on developing a global transport infrastructure. The road system is already in place and will be improved it in the future. A rail network is also going to be developed in the coming years; there is a big international airport under construction; and the port is being developed as well.

The sub-structure works of Phase 1 of the port are almost finished, such as the quay walls, dredging works for the channel, etc. In the next two years, we will focus on the construction of the superstructure, such as pavements, crane beams, technical buildings, gate buildings, and on top of that the equipment such as ship to shore cranes, etc..

In order to have all these people working in this area, it is necessary to create a place for them to live. So the government is building a new city and the roadmap is already clear. The first roads are being built; a hotel complex and the first villas are under construction.

In 2010, Port of Duqm Company (PDC) was created as a joint venture between the Government of Oman and Consortium Antwerp Port, to co-invest, operate and manage the port and industrial zone. What are the main benefits of this partnership?

The Port of Antwerp went into a 50/50 partnership with the Omani Government, and the main objective was to bring in the knowledge to run a port. The Omani Government already used a similar formula in Sohar with the Port of Rotterdam, and in Salalah where a big container operator is running the port. So each time they select a partner with a proven international track record of expertise.

The Port of Antwerp is a big player in the European market. Due to the scale of the port, here in Duqm, the idea is to apply for the landlord model... This basically means that instead of running the port operations, the Port Authority will engage professional terminal operators for each specific discipline. So we will have a container-operator, a dry-bulk-operator, a liquid-bulk-operator, and a multi-purpose-operator. All these players will improve the performance of the port.

How would you evaluate your co-operation with the Government so far?

It is going well. At the end of last year, the government established the Special Economic Zone  Authority at Duqm (SEZAD) and this was a major milestone. We are now working together, so we as PDC can focus on the development of the port, while the Authority focuses on the bigger picture. We also try to assist the Authority where we feel we can add something…

One of the aims is to attract foreign investors and their knowledge. We are bringing big players from the Antwerp Port (like an electricity provider, gas provider, water provider and a company that takes care of industrial solid waste) and the Special Economic Zone Authority together. For this we are planning a visit to Antwerp to showcase how things are working there...

According to Vision 2020, the ports along Oman’s coastline are aimed to complement each other, instead of competing with each other. Sohar has become a major hub for heavy industry, while Salalah is more of a transshipment hub. What is going to be the specialty of the Port of Duqm?

Duqm area is rich in minerals... The area around Duqm is very large and rich in mineral deposits. With vast limestone, gypsumsalt, and dolomite deposits around Duqm, it could become a focus for mining and other associated industries. Together with the gas pipeline coming to Duqm, potential industries will be created. One example: the gas together with the available quality of silica sands creates the potential to make floating glass.

UNITED WORLD: The center piece of the Duqm Port is the Dry Dock facility for ship repair, which is already operative. How will the Dry Dock boost Duqm’s international status?

This is one of the largest dry dock facilities in the Middle East and North Africa (MENA) region. Outside the Gulf you have to go far to find a similar piece of infrastructure. Oman Dry Dock Company (ODC) has been receiving ships since last year and we are supporting their activities with our knowledge from Antwerp. Our Harbor Master from Belgium is taking care of the vessels going into the dry dock. You need specific knowledge to do that because there are quite big ships coming in. The pilots from Antwerp are used to guide large vessels into the locks there so with this qualification they can bring the extra service needed.

Could you comment on the capacity of the port?

The port is designed with a draft of 18 meters and the channel is 19 meters deep. This makes that the port of Duqm can meet the international standards to receive big vessels up to 180 000 DWT.

UNITED WORLD: What specific markets are you targeting? Where do you expect the traffic to come from?

We are focusing on India and Pakistan and more to the South, we also have Africa with big mining activities. Duqm could be a hub for all these markets.

So far $1.7 billion has been invested in Duqm. Where do you see the most attractive opportunities, and where would you like to see investors coming?

The first big step will be the refinery and the downstream of this refinery, from liquid products all the way to plastics. To get that going, we need big players, the same we can find in the Port of Antwerp for instance. Inside the port, we will be focusing on the service providers who can operate a container terminal, bulk terminal and a liquid jetty terminal. We will focus on those players in the first 5 years. The industry will come along, outside the port area, and together with the Special Economic Zone we will fine-tune this strategy.

One of the goals of the Duqm development is to increase the population in this part of Oman. What are the challenges that you are facing with human resources? How many people do you employ so far?

We started a program of dock-workers and port technicians. They will load and unload ships and handle equipment. We started with a first batch of 45 Omanis, which we have selected through a process that took us 6 months. We are mixing people from the Duqm area with people from other regions. It is important to have a healthy environment in the company, if it is too focused on one group there will be no balance.

We understand that bringing jobs to the Duqm area is important, so we want to establish a good communication with the local community and schools in order to start up training, scholarship and other programs..

We work in a very practical way. For example, the Harbor Master, who is coming from Antwerp, is training 2 Omanis. These 2 trainees will participate in pilot activities in the Port of Antwerp as well, it is a part of their program.

Next month dock worker trainers from Antwerp will join us here in Oman, to help our 45 trainees to understand how to load and unload ships and work with specific equipment and systems. There is definitely a link between Duqm and Antwerp, and we are trying to use it as much as possible. We try to implement a knowledge transfer in this way.

Is there a plan to have a cruise ship terminal in the port?

The opportunity is there. The governmental berths are almost finished and these berths are not permanently in use by the Omani Navy or Royal Yacht, so these quays could be used. Cruise ships would be the perfect solution as long as they leave within the time window agreed, once they have left nobody sees traces that there was a cruise ship berthed. We could start this at a very early stage.

As an expat in Oman, what is it that you like most about the country?

I like going to the desert and have a quiet weekend. I like camping very close to the beach as you can walk over to the beach whenever you want. There is nobody around, the space is huge and it gives you the feeling of freedom. It is not easy to have this kind of freedom and privacy in Europe anymore. Oman has 3 million people in a huge area with a 2,000 km of coastline. I am coming from a country where the coastline is only 80 km, so I appreciate the space. It is very nice here, and the people are very kind and open.