Oman International Shrimp Company (OISC) recently filed a claim against the Omani government for compensation for losses after it forced the closure of its shrimp farm project to make way for a port complex, the company said in a statement.
OISC said the 1,200-hectare farm in the Duqum area, 500km south of Muscat, was closed down after a successful start-up of what would have been “one of the largest integrated shrimp farms in the world supporting the employment of over 2500 people in a remote area of Oman.”
According to OISC, it began operations in 2000 with substantial encouragement from the Omani government and appropriate government approvals. Successful harvests in the summer of 2002 brought multiple international offers to purchase 100 per cent of the future production.
“Unfortunately the Omani Government forced the closure of the project due to a potential plan to build a large dry dock and port complex on the site in the future.
“After 18 months of discussions the parties have concluded that there is no suitable alternative site that combines all the requisites for large-scale shrimp farming and which the Government will release.
The government has refused compensation to the shareholders for their substantial losses, and has also refused to submit the issue for arbitration,” the statement said.
The American shareholders in OISC – Sea Farms International, owner of the largest shrimp farm in the Western Hemisphere, and DevCorp International, an American-owned investment group – first began investigating the potential for shrimp farming in Oman in 1995.
“After five years of extensive research and in the face of substantial skepticism, DevCorp and Sea Farms, together with Omani partners, launched OISC to implement the project in Duqum. A previous attempt for a similar project had failed in the mid-1980s resulting in large losses by local investors, the Government, and banks. However, OISC, using its own financial resources, succeeded in its new project due to the substantial experience and appropriate technology brought by the American partners to the venture,” the statement said.
The international law firm of Trowers and Hamlins will process the claim in the Omani courts, OISC said.
