OMAN - Industry
Chairman, Special Economic Zone Authority Duqm (SEZAD)
HE Yahya Al Jabr attended the Kellogg School of Management, Harvard Business School, and Darden University. In addition to being Chairman of the Special Economic Zone Authority Duqm (SEZAD), he is also a member of the Board of Directors at the Central Bank of Oman, and a Board Member of the Civil Service Pension Fund and the Oman Investment Fund. Furthermore, he is the Chairman of Pak Oman Investment Company and Chairman of the Capital Market Authority. Earlier in his career he was the General Manager of Oman International Bank. He is also currently a member of the Hawkamah Institute for Corporate Governance.
The government of Oman and His Majesty feel that during the past 40 years we have developed many of Oman’s regions, and now it is time to focus on the Al Wusta Governorate. We are doing this by taking advantage of Duqm’s strategic location to create a first-class industrial zone with associated free zones and a large port. That is the reason we have built one of the biggest ports, around 140 square kilometers in size, in the Middle East and North Africa. The free zone itself is around 1,777 square kilometers, which is also one of the largest in the MENA area. The strategic location means we can attract shipping lines, and the port can serve the Far East and our neighbors in India, Pakistan, East Africa, Europe, and the GCC. The zone we have designed is also more integrated, with individual subzones, including tourism, training and education, logistics, ports, the dry dock, light and heavy industrial fishing, and cement and building materials. The zone will also have an international airport with cargo capabilities, as well as a train station, through which most of the goods coming through the port will be transported to neighboring countries.
The dry dock is working at full capacity. The port already started commercial activity, though on a limited scale. The dry dock is being managed by a South Korean Company, DAEWOO, while the port is being managed by the Port of Antwerp. The government of Oman and the Port of Antwerp have established a joint venture, the Port of Duqm Company, which is running the port. Even when the work is finished, there will still be a lot more to do, especially in storage and logistics. Petroleum Development Oman (PDO) and other oil companies have started to use the port to ship and transport large equipment to their oil fields in and around Duqm. This equipment comes in through the ports of neighboring countries at great cost to the companies. Duqm Port will reduce the distance and cost of transportation. Other logistics companies, including DHL, have expressed an interest in setting up an office in Duqm.
The business generated by this new port and its attendant facilities will be new business for Oman. Duqm will complement the existing ports in Oman, as the government of Oman has planned a specialist capability for each port. Salalah specializes in transportation, Muscat in cruise ships, Sohar is industrial, and Duqm will concentrate on cargo plus other things. We will complement each other, working for the benefit of Oman. Duqm’s greatest advantage lies in its size; we will not face the problems that others face regarding expansion, because we have dedicated a huge area of land. Duqm is built on a greenfield site on which there were no houses or buildings.
The refinery will add tremendous value to Duqm. It is already doing so, with many companies already doing studies so they can start construction in 2014. It is projected that by the end of 2017 the refinery will be in operation. Oman Oil is playing a big role in the development of Duqm with its investments in the refinery, petroleum jetty, and petrochemical industries. We are happy with the overall progress in Duqm and feel confident about job creation for Omanis.
The coastline in Duqm is extremely clean because it is far away from population centers and less affected by pollution, so it is an ideal area in which to promote tourism. We have a special zone for tourism with 26 square kilometers and 18 kilometers of beaches, which is not small. The Crown Plaza Hotel is already completed and there are plans for further hotels. We have a request from other investors to build a waterpark in Duqm. It is not finalized, and discussions are ongoing, but we can use that to make it more attractive for tourists. To make it more attractive we need to link it by train. This authority was established 13 months ago and we have already managed to link Duqm with Muscat by plane three times a week. We’d like to see it on a daily basis to make Duqm a weekend getaway destination. Our airport will cater for both domestic and international passengers and cargo, attracting tourists from across the GCC. This is one of the visions of His Majesty; to create something huge to diversify the economy. The Duqm project will develop the Al Wusta region, create jobs for Omanis, and contribute to the country’s GDP. This is a region about which His Majesty has thought for a long time, and now we are implementing what he has in mind and we hope we can achieve his expectations for the country. Where there used to be a very low population, we now have at least 11,700 people carrying out different activities living in Duqm. All the properties in Duqm will be available for lease rather than ownership, and we don’t have any restrictions when it comes to foreigners. It is a 100% foreign ownership zone.
Oman is known for its beautiful natural assets. We were the first country in the Middle East to have a Ministry of Environment. His Majesty wants to safeguard the environment, so we have very strict environmental standards. Here in Duqm, we have kept the industrial plants far from the beaches and the tourism infrastructure. We have designed Duqm with this in mind, with a big buffer between each zone to avoid contamination. In addition, the wind in Duqm blows predominantly from the south to the north and sometimes from the west to the east, so we have placed the refinery downwind of the residential and tourism areas. The Ministry of Environment has been very helpful and has sent some of its staff to work with us to provide expertise and advice.
We expect the total population of Duqm to be around 67,000 by 2020. That is the expectation, and Duqm already has 11,700. The refinery is expected to draw in big numbers. Right now there are about 31 companies with contractors or subcontractors working here. Because this is a specialized economy, we don’t want to have a very rigid policy of Omanization. I feel that once we have a good training center in Duqm, we will see percentages beyond what we have planned. We have planned 20% and I am sure it will go beyond that. People want to see local people to help them communicate with the residents, locals, and neighbors. For example, in the dry dock, the Omanization percentage is good even though it is new. It has gone beyond 25% and we are planning an even higher ratio.
One way is through road shows, and another is through conferences. We also use our website and booklets. We have to be very careful because we don’t want people to have too high expectations too early. We are still doing a lot of construction and building a lot of infrastructure. we are careful about promoting certain other areas where work is still required to make it ready for investors.
I think by 2020 if we continue at the same speed. We can be proud that in these 13 months we have achieved so much. It would not have been possible without the full support of the entire government. We have full support from every ministry because we all want to meet the visions of His Majesty to put Duqm Special Economic Zone on the world map.
© The Business Year – April 2013
OMAN - Green Economy
Country Chief Executive, Oman, Bureau Veritas Middle East LLC – Oman
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