Port of Sohar Magazine 2008 Issue 3 by Oman Establishment for Press, Publishing & Advertising (OEPPA), Business Development Department

His Majesty Sultan Qaboos bin Said Sultan of Oman

Drawing subject to change without prior notice

Sohar Industrial Port Area and Special Economic Zone Port of Sohar Magazine - 2008

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Rotterdam has been one of the world’s major centers for oil and chemicals for some decades now. Its strategic location and unrivalled access to markets all over Europe have led to the establishment of a modern and diverse cluster of oil and chemical activities. The port operates all year round, 7 days a week and 24 hours a day and is a perfect business location for both global and local players. It is ideally located in the heart of a European market with 450 million consumers. Because of its logistic and industrial facilities, the excellent hinterland connections and the inspiring investment climate, Rotterdam is your number 1 European business partner. www.portofrotterdam.com

NEW INTERNATIONAL CONNECTIONS SPAN THREE CONTINENTS What began seven years ago as an Omani-Dutch venture now encompasses approximately twenty-two countries around the world participating as investors and/or employees in what the CEO of the Sohar Industrial Port, Jan Meijer refers to as the ‘United Nations of the Port’. Nations represented include all GCC countries, Bangladesh, Belgium, Brazil, Canada, China (Hong Kong), Egypt, France, Germany, India, Iran, Korea, the Netherlands, Norway, Pakistan, South Africa and the United States of America. Brazil, India and South Africa are relative newcomers to the Port, bringing diversity of experience and the potential for new economic and downstream product synergies in this already thriving project. Spanning three continents from far corners of the world, the economies of India, Brazil, and South Africa combined represent a considerable proportion of world wealth creation.

Port of Sohar Magazine - 2008

The accelerating economy of India needs no introduction; and Larsen & Toubro Limited (L&T), India’s largest engineering and construction conglomerate has undertaken countless projects in Oman over the past few decades. Among L&T’s more interesting recent engineering feats are the tunnels at Shangri-la’s Barr Al Jissah Resort & Spa and Al Hoota Cave. L&T have expanded from their core business in engineering and construction to the electrical, electronic and IT business areas; and have, for example, assisted PDO with the operation and maintenance of electrical and instrumentation works. Having built many of India’s modern landmarks, L&T enjoys a premiere brand image in the country as well as a growing international presence, especially in the Gulf and Indian Ocean Rim regions. They currently have worksites in 20 countries. L&T attribute their success to a strong focus on the customer and a constant quest for quality.

Interview with Mr K Ventatramanan, CEO of Larsen & Toubro The President (Operations) and CEO of L&T, Mr K Ventatramanan (KV), answers questions in a concise manner, beginning with summary bullets and following up with explanation of these points. I began the interview by asking Mr KV to comment on what he sees as the importance of the India-Oman link in this particular project. •

Oman’s good investment regulations for attracting foreign investment

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Oman’s free trade and open market policies

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Good scope for growth, with export markets within easy reach

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Friendly people and environment

Mr K Ventatramanan went on to say that Oman’s free trade and open market policies have been attracting overseas investors for the past three decades. “The nation has a dedicated policy towards privatisation and 24

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has fostered a close relationship between the public and private sectors. Oman’s open door policies have always offered a warm welcome to foreign investors. “India’s relations with the Sultanate of Oman in particular go back several centuries; and, supported by historic links, the multi-faceted Oman-India relationship has been built on the basis of mutual trust and respect, bolstered by numerous commonalities. The links of friendship have been growing stronger and more productive, increasingly benefiting the peoples of the two nations. Indo-Omani bilateral trade crossed the 1 billion US dollar mark last year and commercial relations are deepening and growing impressively”. Mr VK reflected on the long history of the close ties between India and Oman, noting that the two nations are linked by geography, history and culture. “There is evidence of people-to-people contacts dating back to the Indus Valley civilization of the 3rd Millennium BC; and, in later times, links with the Gujarat and Malabar coasts. In past centuries there has been notable involvement of rulers. In 1786, Tipu Sultan sent an impressive diplomatic delegation to Oman. Sultan Taimur, the present Sultan’s grandfather, spent more than 30 years in Mumbai after his abdication until his death in 1965”. In recent years, India-Oman relations have been marked by regular high-level contacts, which Mr VK believes have helped to foster close understanding and a shared vision to develop an economic and cultural partnership. Particularly important in Mr KV’s view is the contribution of the Indian community, whom he sees as working side by side with the people of Oman in the development of the country and promoting cultural, education and bilateral economic relations. “The Indian community has made a significant contribution in the remarkable development story of the Sultanate under the visionary leadership and guidance of His Majesty Sultan Qaboos Bin Said; and has thereby earned for itself extraordinary love, warmth and dignity in the hearts of Omani nationals”. Given that L&T has a long history of success in Oman and the Gulf, as well as in many other countries. and obviously has many choices as to where to do business in this global world, I asked Mr KV about the special attraction of Sohar.

Rachel Caruana Assistant Logistics Manager, OT Malta

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positive attitude as on her ﬁrst day – simply because she cares.

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> Sohar Aluminium > Shadeed Iron & Steel > Sharq Sohar (Steel Melt Shop) > L&T Modular Fabrication Yard > Vale’s Iron Ore Pelletising Project

Oman’s nascent primary metals industry is touted as the next engine of the country’s economic growth. Launching initially with primary aluminium and steel, this emerging sector has all the hallmarks of an economic dynamo that, along with petrochemicals, promises to accelerate economic development, encourage spin-off industries, and generate new employment opportunities. The Port of Sohar is playing host to this new, exciting addition to the Sultanate’s rapidly diversifying industrial base. As with many other industrial ventures that have chosen to locate at Sohar, the port’s world-class maritime infrastructure and support services are a major draw for investments of this nature. And in a testament to Sohar’s broad investment appeal, the metals cluster taking shape at the industrial port is not limited to the production of primary metals alone. It encompasses a steel melt shop and a unique modular fabrication yard, and will soon host a major iron ore pelletising plant – industrial ventures that are truly representative of the success of Oman’s rapid economic diversiﬁcation.

Port of Sohar Magazine - 2008

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When the Government of Oman set out to lay the physical groundwork for a greenfield industrial port at Sohar in 1999, its initial goals were rather modest. But following its partnership with the Rotterdam Municipal Port Management in 2002, and the tide of investor interest that soon ensued, what started out as a measured and gradual port development soon turned into a mammoth, runaway enterprise. Thus came into play the unrivalled expertise of the managers of Europe’s biggest maritime hub – the Port of Rotterdam – in shaping and guiding Sohar’s destiny as a world-class industrial port. From the very outset, Sohar Industrial Port Company SAOC (SIPC), the joint venture partnership of the Port of Rotterdam and the Omani Government, set out to create a first-class infrastructure to underpin Sohar’s future success. Working closely with the Ministry of Transport and Communications (MoTC) and some of the best consultants in port planning, SIPC formulated a roadmap for Sohar’s development as an industrial port. The first construction contracts were handed out later when South Korea’s Daewoo Engineering & Construction

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Co Ltd was awarded the contract to build the port’s breakwaters in June 1999. The two main breakwaters – of 2.9km and 3.1km length – extend approximately 1.8 km from the shore to a depth of about -11 metres Chart Datum (CD). Work was completed in May 2002, by which time the contractor had also put in place nearly three million cubic metres of rock and 80,000 precast concrete armour units. Phase 1 of the marine works package also included a dredging and reclamation contract that went to Hyundai Engineering & Construction Co Ltd in January 2000. As part of this contract, the basin and the approach channel were dredged to -16 and - 16.5 metres CD respectively, yielding also some 18.7 million cubic metres of dredged material. Also that year, the contract for the construction of the ﬁrst phase of quay walls was awarded in July 2000 to a joint venture between Sezai Turkes Feyzi Akkaya Construction Co (STFA) and Attila Dogan Construction & Installation Co Inc, both of Turkey. A total of 990 metres of quay wall, comprising of a 21.5-metre high precast concrete

block wall, with an in situ concrete capping block, was constructed. This quay wall was earmarked for container/ general cargo berths. The contract also called for the construction of a pair of bulk liquid berths each comprises a loading platform, two breasting and four mooring dolphins. The structures consist of reinforced concrete superstructure supported by steel tubular piles. In 2002 development of the port shifted into higher gear with the government kicking off a second phase of expansion activities. In December 2002 the STFA-Atilla Dogan joint venture was contracted to build two dry bulk berths of 260-metres and 550 metres length, effectively

doubling the length of the quay wall to a total of 1.65 kilometres. The contract also entailed the construction of channels and a breakwater for a Seawater Intake and Return System designed to meet the cooling water requirements of industrial ventures operating at Sohar.

Sound planning for long-term success With waterside infrastructure rapidly falling into place, SIPC and the Ministry of Transport and Communications also moved quickly to develop common user facilities within the industrial port. In July 2004, Consolidated

Port of Sohar Magazine - 2008

Contractors Company (CCC), an international leading engineering and construction firm, was appointed to provide a broad spectrum of infrastructure facilities and services within the industrial area and the adjoining port complex. This includes common utility corridors, roads, electrical services, potable and firewater distribution, fencing, cooling water return channel, flood protection channel, SIPC administrative building, pre gate area and - buildings and other amenities. As a result of these investments in common user and associated landside facilities, the Port of Sohar now boasts all the trappings of a vibrant industrial zone and waterfront. Around 40 kilometres of internal roads, including several broad carriageways, have been built. This elaborate system of user facilities also includes 18 kilometres of storm water canals, 11 kilometres of flood protection channels, 17 kilometres of fencing, 32

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kilometres of potable water network, and 37 kilometres of sewage network. At the same time utility providers such as OETC, MAJAN, OGC, MISC and others have been working together with the Government and SIPC to develop all necessary pipeline and cable networks. But an unremitting inﬂow of investments in new megaprojects and terminal capacity prompted the Government to commence a third phase of expansions at Sohar. The Interbeton Six Construct and Van Oord Consortium was awarded the contract to undertake the construction of Phase III at a cost of around RO 95 million. The expansion – the biggest so far in the industrial port’s development – has enabled the creation of user facilities for several industrial tenants and service providers that

have set up operations at the industrial port. Special berths have also been built for vessels of the Royal Yacht, Royal Navy of Oman and the Coast Guard.

Ambitious expansions A number of industrial and container berths are being built, while major dredging and reclamation works are under way as well. The harbour basin is being deepened from the present –16 metres to –18 metres to allow for the largest container bulk carriers and liquid carriers to call at the industrial port. The approach channel is being further dredged to -18.5 metres, from the present depth of –16.5 metres. Besides, the existing quay wall is being extended by a further 1.9 kilometres to allow for several dedicated berths to be established. Signiﬁcantly, the huge volumes of dredged material generated as a result of this expansion project

is being used to reclaim land which will eventually go towards the creation of a 100 ha. future development area planned along the inside face of the northern breakwater. In all, some 25 million cubic metres of material is expected to be dredged as part of the Phase 3 expansion. Part of the dredged material will also be used for beach replenishment purposes to the north of the industrial port. More importantly, part of the dredged material will be used on the south of the industrial port to create new swathes of land for future projects. When completed around end-2008, the third phase expansion program will result in a doubling of berth capacity from the present roughly 2 kilometres to about 4 kilometres. In addition, 300 m of heavy load platform will be available in the Harmool harbour and 500 m of

Port of Sohar Magazine - 2008

that reﬂects Sohar’s prestige as a world-scale maritime and industrial hub.

service berth for tug boats, pilot boats and other general supporting boats.

Nurturing a safe and secure environment Attention is also focused on putting in place all administrative, security, civil defence, healthcare, and other civilian infrastructure and services necessary to ensure a smooth, safe and fully functional environment within the industrial port. The Royal Oman Police, which oversees all security within the port, has also begun managing traffic. Construction work on a well-equipped Civil Defence station is well under way. SIPC will also take steps to improve the aesthetics of the port environment through landscaping and other beautification initiatives. SIPC’s headquarters at Sohar, due to be occupied by the second quarter of 2008, is an architectural landmark in its own right. Equally striking will be the Main Pre Gate, conceived as an imposing edifice 76

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While the Government up to now provided ﬁnance for all marine and landside infrastructure for the port, SIPC’s joint venture partner, the Port of Rotterdam, pitched in with expertise covering a wide spectrum of areas, such as special planning, civil engineering, marketing, public relations, port and ﬁnancial management, industrial and human resources development, nautical management, environmental engineering and so on. Port of Rotterdam has also routinely despatched experts from the Netherlands, and formed specialist back-up teams in Rotterdam for consultation, investigations and support and project management cells to support the Sohar management.

SIPC at the helm Now, nearly ﬁve years into its mandate, SIPC recently assumed full management and operational control of the port in line with the terms of the historic July 2002 concession agreement signed by the Government with the Port of Rotterdam. It signals the port’s transition from the initial developmental phase to the commercial stage – a shift that came into effect on 1st January 2007. All basic marine and landside infrastructure established during the developmental phase was ﬁnanced by the Government. However, future improvements to infrastructure and services will now be shouldered by SIPC under its

enlarged management role. Accordingly, SIPC will fund if approval is granted, for example, construction of a jetty to be used by the Brazilian mining giant Vale which will shortly commence development of a major iron ore pelletising plant at Sohar. The jetty and trestle, which will be built beyond the northern breakwater, is composed of an import terminal capable of accommodating giant ion ore carriers of roughly 350-400 metres length, 60-70 metres wide, and 23-metre draft. An export terminal with two berths will be equipped for Cape-size vessels of around 270 metre length and 40-metre width. Work on the jetty is expected to be completed by 2009 to allow for Vale to build the requisite superstructure facilities.

(MoTC), it has agreed a plan for the construction of an interchange across the Batinah Highway designed to ensure smooth traffic flows in and out of the port. The main component of the project is a partial cloverleaf interchange, complete with collector and distributor roads and service roads to facilitate the transfer and exchange of traffic. Also as part of the project, the selected contractor will construct several kilometres of a new access road leading to the smelter of Sohar Aluminium Company, the Sohar Industrial Estate and the new Special Economic Zone. Port access roads and link roads will be streamlined and strengthened, while a number of roundabouts will be constructed to ensure the smooth flow of vehicles.

As with any major industrial port, SIPC anticipates development and growth to be an ongoing process. The company is carrying out spatial planning studies aimed at optimizing use of remaining land within the concession area, either for new industries or services. A sophisticated Geographical Information System (GIS) has been developed incorporating all the asset drawings and technical information to serve as a tool for management of all spaces and corridors.

Having assumed full management of the port’s diverse marine and landside infrastructure, SIPC is also taking steps to ensure that these facilities are in shipshape condition. Towards this end, SIPC has awarded a contract to the consultancy ﬁrm DHV, to draw up a maintenance plan for the infrastructure within the Port of Sohar. The maintenance plan will cover all facilities within the complex, such as the port roads, quay walls, jetties, ﬂood protection canal, seawater return canal, storm water canal and breakwaters.

SIPC is also working closely with the relevant government agencies to ensure that the wider transportation infrastructure is in keeping with the industrial port’s needs. With the Ministry of Transport and Communications

Indeed, SIPC is committed to maintaining the highest levels of accountability to the port’s many stakeholders, maintaining Sohar’s reputation as a port of international best practices. Port of Sohar Magazine - 2008

Keeping the Sohar industrial port area humming are a host of service providers whose commitment to efďŹ ciency and quality is as critical to the operational success of the Port of Sohar as the heavy industries now operating or under development at the port.

> Air Liquide > PEIE / Majis Industrial Services Co > Oman Gas Company > Sohar Power Company > Svitzer Sohar > Majan Electricity Co > Omantel / Oman Mobile Port of Sohar Magazine - 2008

HSBC

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OAB

Oman Arab Bank (OAB) ranks among the top providers of project finance and related services in the Sultanate. Over the years the Bank has financed a number of highprofile ventures, including most recently the projects of Salalah Methanol, Sur IWP, Barka IWPP Phase II, Oman Aromatics, Sohar Aluminium, and Oman Shipping Company. This is in addition to financial support extended to EPC contractors implementing these projects. Several major infrastructure projects too have benefited from OAB’s financial assistance. Key among them are the Port of Sohar (third phase) and Port of Salalah expansions and the Oman Wastewater scheme. Furthermore, the Bank has extended finance facilities to a number of local and international companies involved in industrial and infrastructure initiatives at the heart of Oman’s resurgent economic growth. Established in 1984, OAB has gained a reputation for integrity, customer services and its portfolio of banking products designed to meet the diverse needs of customers. In addition to supporting major industrial and infrastructure developments, OAB has provided professional services to customers in the management of their investments in the securities market. It has also introduced products catering to real estate financing and tourism projects in the country. On the retail banking front, OAB has plans to introduce sophisticated products and services to meet the increasing level of sophistication of its retail customers. Recently, the Bank introduced the Al Dar housing loan scheme, which offers 80 per cent finance with a top-up of up to 20 per cent finance through Al Madmoon loans, as well and Dhaman bancassurance products, as well as various investment and insurance

schemes, such as the Education plan, Savings plan, Retirement plan, and life and accident coverage. The Bank has played a leading role in developing e-banking services in Oman. This contribution was recognised by the Central Bank of Oman (CBO) when it selected OAB as the best bank in the usage of the electronic payment systems (RTGS/ACH) implemented by CBO in 2006. OAB is also the only bank to introduce the Business to Business (B2B) system offering instant bill collection services for telecom service providers Omantel, Oman Mobile and Nawras. The Bank has also used the Business to Government (B2G) system to instantly collect the dues for ministries and government establishments. This has enabled the Bank to establish itself as a leading ebanking service provider to the government. OAB is also offering services on the Internet with high standards of security. It has also launched SMS banking services enabling customers to avail themselves of all basic banking services including the payment of utility bills electronically. Moody’s Investors Services has upgraded the long-term and short-term foreign currency deposit ratings of OAB to A2/Prime-1 from A3Prime 2. The outlook on these ratings has been changed from positive to stable, underscoring the robustness of OAB.

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Arabic Directory

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