Plans to expand capacity at Sultan Qaboos Port in the Omani capital have been thrown into doubt, with several of the firms bidding for the consultancy contract saying that they expect the scheme to be scrapped due to its high cost.
Bids were submitted to Oman’s Port Services Corporation (PSC), in January to design and supervise the project, which was budgeted at $390m. Under the plan, container capacity at the port was to be raised to 1 million 20-foot equivalent units (TEUs) from 280,000 TEUs.
However, it is understood that the cost estimates from the bidders, Australia’s WorleyParsons, India’s Consulting Engineering Services, Egypt’s Hamza Associates and Atkins of the UK, were all significantly over budget.
There has been no progress in the bidding process since then, with PSC declining to clarify its intentions to the bidders, despite repeated requests for information from them.
WorleyParsons has also been acting as consultant on the project but despite that, officials there say it cannot get clarification from the PSC of its intentions.
A number of the bidders now say that they do not expect the original project to go ahead.
“We believe that the [current] plan has been cancelled and plans for the port are being re-evaluated,” says an official at one of the bidding companies. “There has been no official comment but we hear they are looking to expand container capacity elsewhere. The work done on the bidding has been a waste of time.”
The high price of the bids has been blamed on the port’s location within the city which severely hampers road access to the site which, in turn, often causes long delays for users of the port.
The bidders are understood to have emphasised the need for development of the infrastructure around the port, thereby increasing the cost. PSC is understood to be considering an alternative scheme, converting the port into a cruise and yachting terminal.
“They will probably keep the port for tourism. There are a few problems with the area around the port in terms of transport links,” says the official.
Despite the confusion at Sultan Qaboos Port, Oman’s wider port sector is enjoying strong growth and other ports in the country are now hoping to take advantage of the apparent difficulties at the capital’s port by persuading shipping firms now going to Sultan Qaboos Port to move their operations.
The ports at Sohar and Salalah are expanding and taking on new business, while a drydock project at Duqm is also progressing rapidly.
“We have seen imports of bulk products such as cars moving away from Muscat to Sohar and we are convinced the same will happen with containers,” says an official at Sohar Industrial Port.
“We see Muscat developing into a city port. It is increasingly difficult to move cargo from the port area to the main highways as it is so congested on the land side. The Muscat expansion plan will not happen. It will be very costly to expand capacity there.”