FREE ZONE FORMULA OR FRENZY?

Was Jebel Ali’s success down to being in the right place at the right time or can other similar initiatives succeed elsewhere? Tony Restall has recently moved from Aden to Oman where the government is establishing its own free zone adjacent to the Salalah container terminal.

At present most of its business is transhipment but as the region develops Salalah Port Services (SPS) believes there will be a shift towards more local import/exports.

“One of the main catalysts for this shift will be the development of a free trade zone, ” it declares.

“We inherited a greenfield site with a large tract of land adjacent to the container terminal, ” says Restall who was hired to develop and market the project. The free zone is a state initiative with the government responsible for infrastructure but the intention is to launch it as an IPO with shareholders and an accountable board. So from day one it will be run as a commercial entity although it is a government enterprise.

“I have seen many independent studies by shipping lines as well as ports and everything points to Salalah being the super-hub of the region, ” insists Restall. “It’s well-positioned to pick up that trade on the east/west route through Suez. It is up to us to see what we can pick off and add value to.”

The symbiosis between port and free zone is illustrated in their approach. As SPS expands its capacity the free zone expects to pick up business from that source. “But hopefully when we get up and running the tables will be turned.” Also we want to generate employment opportunities for the Omanis.” More than anywhere else in the region, Restall insists, Oman places great emphasis on training its local people to make them available and suitable for industries that are coming up in the vicinity, be that in the free zone or anywhere else.

Salalah’s free trade zone will have company.

Renewed links with Teheran have allowed Afghanistan to use Chabahar for its importexport trade cutting Kabul’s traditional dependency on Karachi. A bilateral Trade and Transit Agreement created the Chabahar Free-Zone Authority, which allows the import and export of goods to and from Afghanistan at a 90% discount on Iranian Customs duties or tariffs. It also allows 20% of the port’s warehouse space to be allocated for goods en route to Afghanistan, which will also be given the opportunity to construct its own quay in Chabahar. Local sources say these terms and conditions are much more attractive than what is being offered in Karachi.

Meanwhile with the completion of both phases of Gwadar’s upgrade, a Special Industrial Development Zone 30km from the port, with an area of 4,000 hectares, is being mooted. An Export Processing Zone (EPZ) is also planned for assembly plants and other industries enabling manufacturers to market their products in the region.