MSC pulls out of Salalah

26 July 2002

Switzerland-based Mediterranean Shipping Company (MSC)has ceased to operate from Salalah port and moved its Gulf operations to Dubai. The company's last vessel to sail from the Salalah container terminal departed in early July. 'MSC was unhappy with the lack of local cargo available in Salalah,' says Jack Helton, chief executive officer of Salalah Port Services Company (SPS). 'We are talking to several shipping companies at present and we were doing this prior to MSC's decision to pull out.'

MSC's withdrawal leaves Salalah with just two registered bulk-freight operators. They are the Danish/US Maersk Sealandand SAF Marineof South Africa. SPS plans to address the issue of local businesses using the port by pushing through the development of the 6,000-acre Salalah free zone project, which is to be built adjacent to the main container terminal. The government is expected to issue a decree approving the scheme in the fourth quarter. Attracting industry to Salalah is deemed essential for the port's long-term future (MEED 5:4:02; 4:5:01).

Salalah's performance, which is heavily dependent on transshipment, has risen steadily since the first cargo was loaded in 1998. In 2000, the port handled 1.1 million 20-foot equivalent units (TEUs), up from 650,000 TEUs in its first full year of operation. In the first six months of 2001, containers handled increased by almost 15 per cent to 570,983 TEUs, compared with the corresponding period of 2000.

SPS is also waiting for the government to approve its plan to expand facilities at the port. The project, valued at $150 million, involves the addition of two berths at the port and the extension of the existing breakwater to create a deep-water harbour with a 900-metre turning basin capable of handling the next generation of 400-metre-long freight vessels.

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