Hillwood pulls out of Salalah FZ

27 September 2002

Plans to build a 6,000-acre free zone on a site adjacent to the deep-water container terminal in Salalah have been thrown into disarray by the withdrawal of a major investor. Hillwood Strategic Services of the US announced in mid September its intention to pull out of the project on the eve of signing a key shareholders' agreement with the government (MEED 5:4:02).

The company, which is the largest operator of free zones in the world, was expected to take a 40 per cent stake in the venture alongside Salalah Port Services Company (SPS)and the government. Political instability on the Indian subcontinent and rising levels of uncertainty in the Gulf were given as the main reasons behind the company's withdrawal.

The formation of the proposed free zone in Salalah has been slowed by concerns over its impact on the Dhofar region. 'The free zone is not going to succeed without the government's support,' says an SPS spokesperson. 'We are disappointed that everything has taken so long. The bottom line is: the free zone will benefit the port and bring more jobs to Salalah.'

In July, Swiss-based Mediterranean Shipping Companypulled out of Salalah leaving the Danish/US Maersk Sealandand South Africa's SAF Marineas the port's two remaining registered freight carriers (MEED 26:7:02, Transport).

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