GCC Supply Chain and Logistics Conference — The implications for Oman’s transport and logistics sector post the establishment of a high-speed national rail network will be detailed at the GCC Supply Chain and Logistics Conference, set to take place during April 15-16 at Al Bustan Palace — A Ritz Carlton Hotel. An entire session, dubbed ‘The Game Changer — Oman and GCC Railway Project’, has been allocated to this keenly anticipated topic on the second day of the two-day forum.
Abdulrahman al Hatmi, Director of the Oman Railway Project at the Ministry of Transport and Communications, will kick off deliberations on ongoing efforts to design and develop a modern passenger and freight based railway system running the length and breadth of the Sultanate. Estimated to cost in the order of RO 6 billion, the project will initial run from Buraimi in the northwest to Sohar, and onward to Muscat and Duqm.
The roughly 1,061 km alignment envisaged in Phase 1 of the project also takes the railway line to Muscat, Nizwa, Ibra and Sinaw. Onward connectivity with Thamrait and Salalah, as well as Al Mazyounah on the border with Yemen, is also a priority for the Omani government once technical challenges related to the alignment and terrain are addressed.
Rail-based logistics are a key topic for discussion at the GCC Supply Chain and Logistics Conference, organised by Al Nimr Expo in collaboration with the Ministry of Transport and Communications. Also backing the forum are the Oman Logistics and Supply Chain Association (under formation), the Chartered Institute of Logistics and Transport (CILT), and the Embassy of the Kingdom of the Netherlands in Muscat. Oman Establishment for Press, Publication and Advertising (OEPPA), represented by the newly established Communications and Special Projects Department, is a Strategic Partner.
The session on the Oman-GCC railway project will also feature presentations by a number of international experts who will provide their perspectives on experiences and lessons learnt from the European Union’s perspective. Speakers include Anders Lundberg, Senior Consultant — Vectura, Stockholm and Former Director of Swedish Rail; and Micheal A Bedke, Co-Chair of the Rail Sector, Partner, DLA Piper, US. An overview of the UAE’s immense success in developing the trappings of a rail network will be provided by a senior executive of Etihad Rail.Later, a panel discussion will deliberate on the challenges and opportunities linked to the development of a pan-GCC railway network. The panellists will debate the challenges of developing a common GCC-level technical, legal and regulatory framework. Experts are of the opinion that Oman’s National Rail Network has the potential to serve as a ‘land corridor’ for the movement of freight between the country’s principal maritime gateways at Salalah and Sohar, on the one hand, and the rest of the GCC, on the other. Integrated with the GCC-wide rail network, the national rail system can effectively help international shippers bypass the sensitive Strait of Hormuz waterway to get their goods safely into and out of the Gulf region. This, in effect, makes the national rail project a logistics game-changer, it is stressed.
It is understood that the 165km Sohar-Buraimi segment of the network will among the first sections of the rail project be the first to be taken in hand for implementation, given the strong potential for an early uptake of rail-based freight services between the industrial port and the Gulf states. Sohar Industrial Port Company (SIPC), which operates and manages the Port of Sohar and the adjoining Freezone Sohar, says it has been liaising the Omani authorities to ensure that its key industrial tenants and logistics service providers are suitably integrated with the national network.
SIPC has also been studying the rail connectivity requirements of Vale Oman, which operates a huge iron ore pelletising plant, Oman International Container Terminal (OICT), and C Steinweg Oman, which operates a general cargo terminal at the port. The port authority says it is preparing for a more intensive study with assistance from a Dutch company to ensure that rail connectivity with the port and free zone is optimised. It is also working to ensure improved rail connectivity with Abu Dhabi in the United Arab Emirates.
Freight volumes expected to be generated by Sohar Port are projected in the range of 12 million tons per year in 2016, dominated primarily by shipments of iron ore pellets from Vale’s operations to DRI steel mills in Qatar, Saudi Arabia and the UAE. Other cargoes expected to be transported by rail include shipping containers, aluminium ingots, and dry bulk merchandise. Freight volumes are expected to burgeon once major industrial schemes such as Jindal Shadeed Iron and Steel and Vale Oman expand the capacities of their respective plants, it is learnt.But it is Salalah Port that authorities have billed as key to the long-term success of a ‘land corridor’ for moving rail-based freight between Omani ports and destinations across the Gulf.The logistics hub overlooking the Indian Ocean currently handles 3.5 million TEUs of containers per year and has plans to eventually lift this capacity to 10 million TEUs per year. General cargoes are also growing in volume and variety at the maritime gateway.
Rail connectivity between Salalah Port and GCC network, say experts, has the potential to encourage international shippers to use Salalah as a transshipment point for merchandise flowing in and out of the Gulf. Rail-based transit of goods to and from Salalah is not only faster than sea-based transshipment, but also delivers significant cost benefits to shippers, it is pointed out.
For example, freight trains travelling at a proposed speed of 120 km per hour can get containerised goods to their destinations in the Gulf, in some cases, 5 to 6 days earlier than if transshipped by sea. Additional steaming time into the Upper Gulf, plus days spent by the container idling at a transshipment hub, can add to shipping costs, it is noted.
More importantly, shippers and shipping lines can bypass the Hormuz Straits, passage through which typically attracts higher insurance costs and other risks, particularly during periods of political tension in the Arabian Gulf.
Source: Time of Oman