Work is set to start on the new Salalah free trade zone adjacent to Salalah Port. Salalah Port Services (SPS), which runs both the conventional and container ports in Salalah, is acting as the project manager for the free zone. Once the project is launched, a new company called Salalah Port Free Zone Company will be formed to manage the zone.
The US-based Hillwood, which has considerable experience in developing free zones, will be the strategic partner of the project. Rules and regulations governing the setting up of companies within the zone will be formed by the government and the Salalah Port Free Zone Company will be the implementing authority. This will remove bureaucratic delays, says SPS marketing and sales manager Bill Burns. "Investors need to go only to one source for all their needs. There will be no need to move from one government office to another for licences.''
''The company will, in conjunction with the Government agencies, have the authority to handle licensing. This is a definite advantage for the investor," says Burns. He promises licences in 48 hours if all the papers are in order. "We will have a good system, a fair system, a straightforward process. Controls envisaged under the laws of Oman, GCC and WTO will be followed.''
SPS has a concession agreement with the government for the zone. The managing authority will be run as a private company. SPS will take a stake in the company.
The FTZ is a fast-track project and the first companies in the zone are likely to be in place before the end of this year. One of the major goals of the project, apart from diversification, is creating employment. At least 5,000 jobs will be created over the next five to 10 years in the FTZ, says Burns. The first phase of the zone will come up within the port authority land.
The proposed incentives include: 100 per cent ownership; low rental and utilities charges; no customs duties; no restriction in repatriation of funds and capital; availability of hard currency and financing; no corporate taxes; Made in Oman status for goods with over 40 per cent value addition; and no maximum period for re-exports.
The target companies for the FTZ are: Computer peripherals, spare parts, fast moving consumer goods/foods, industrial products, trading conglomerates, consumer durables and logistics companies.
"We have already a lot of enquiries and applications from international companies interested in setting up businesses in the zone," says Burns.
Salalah Container Port, launched more than a year back, has been very successful and recently completed handling of one million TEUs. The port has a capacity of 1.2 million TEU and is currently working close to capacity. By the end of the year the port's capacity will also be increased to 1.5 million TEU.
The port handles mostly cargo destined to the Arabian Gulf, India, Far East and South Africa. "We have created a lot of business. Salalah has changed the dynamics of the shipping business in the region," says Burns. On the competition between large ports in the region, he feels that there is enough work for all. Relaxation of sanctions on Iraq, better US-India relations and trade agreements between regional countries with Africa give hope for a bright future, he says.
"Containerisation is growing at over 10 per cent in the region. There is still a vast amount of cargo in India which can be containerised. With these positive factors it is not unreasonable to assume that the growth will be higher in this region than the world average," says Burns. "So long as the ports concentrate on what they do best, there will be scope for everyone to grow.''
