The government on 11 September signed a 30-year concession agreement with Salalah Port Services (SPS) for the operation and management of Salalah port. The signature marks the end of some months of preparations for SPS to take over in such a capacity (MEED 28:4:00).

Expansion at the container terminal is ongoing, with resident engineers Han Padron of the US overseeing studies for the addition of two new berths, bringing the total to six.

The Canadian Hydraulic Centre, part of the National Research Council, has been commissioned to carry out modelling and a final report is expected by November. 'We believe they are very serious about this, ' says Han Padron. 'They have been spending a lot of money on it.' The new berths would be of a similar size and structure to the existing ones.

Their location is one of the issues under study.

On the same day, the government signed a memorandum of understanding with SPS making it the project manager of Salalah port's free zone. Salalah Port Free Zone Company is expected to be set up as soon as final financial and organisational issues have been resolved.

Texas-based Hillwood Development will continue in its role as specialist development consultant for the authority.

The first companies are expected to be established in the zone by the second quarter of 2001. SPS marketing director Bill Burns says the company is aiming at prestigious 'Fortune 500' companies. 'We would like to attract a global base rather than a regional one, ' says Burns. Clients will be mainly from the distribution, light manufacturing and light industry sectors.

The phase one development of the free zone, to cover a total area of up to 12,000 acres in the long term, will cover 260 acres and 15,000 square metres of property. Tenders for the construction are expected to be issued by the end of the year. Leasing arrangements after the initial phase will be made according to client specifications.

The Salalah Port Authority and Salalah Port Free Zone Company are aiming to streamline business approvals, says Burns.

'This is a significant step, ' he says. 'You have got to look at what SPS is - we really will be a one-stop shop.'