Duqm Port holds discussions with Adani Group for investment in region

Sports Wednesday 06/March/2024 08:11 AM
By: ANI/agencies
Duqm Port holds discussions with Adani Group for investment in region

Muscat: Duqm Port in Oman is important from a strategic and commercial perspective. It’s location, overlooking the Arabian Sea and the Indian Ocean, makes it an ideal port for military and civilian vessels.

This Port was officially inaugurated in 2022. Located in the Al Wusta Governerate of the Sultanate of Oman, Duqm is integrated with the Special Economic Zone at Duqm (SEZAD). India’s involvement in Duqm Port is two-fold; first, is the establishment of a  Logistic Base in Duqm for providing service to Indian Naval vessels and second, to utilise it as a destination for investment.

Both ways, India has done the smart thing by investing time and money on Duqm Port. India’s investment in Duqm and its SEZ will create strategic assets which in the long-term will help India in its defence and economic security. The rationale for encouraging the private sector in India to invest more deeply in Oman thus is already present.

While Duqm Port became operational in 2012, it was officially inaugurated only in 2022. Recent developments demonstrate that Indian investors are interested in investing in Duqm and that Oman is open to any type of investment.

Saleh Hamood Al Hasani, Advisor to the Chairman of the Public Authority for Special Economic Zones and Free Zones in Oman, highlighted Muscat's 'welcoming' stance towards investments by India’s Adani Group.

Speaking on the sidelines of a special event titled “Invest in Oman”, Hasani said that Oman is highly optimistic about Indian investments in the country, particularly in the development of the Duqm port.

Currently, the Duqm SEZ is the location of an Indo-Omani joint venture, consisting of investment worth US$ 1.2 billion to establish the largest sebacic acid plant in the Middle East.

Hasani noted "An Omani delegation has visited the Adani office in India for detailed discussions for port development". 

When asked if there are any obstacles to the development of the Duqm port project, Al Hasani clarified that the Omani side is exploring opportunities to attract development."

“The deal with Adani is open and we do not close any doors with anyone. We are here to explore opportunities to bring more development from different countries. Reflecting the strong bilateral bonds between India and Oman, Hasani said "India is our strong partner...We are still interested and hope that the Adani management will take a decision and hopefully, we will be able to put things together".

Earlier, several Indian top officials, including Amit Narang, India’s Ambassador to Oman, and Admiral Hari Kumar, the Indian Navy Chief, among others, have visited Duqm Port. The economic think tank Global Trade Research Initiative has indicated that with Oman, over 6,000 India-Oman joint ventures exist in Oman with an estimated investment of over US$ 7.5 billion. Further, Indian companies are leading investors at Sohar and Salalah Free Zones of Oman.

Duqm Port holds strategic significance in the region, and discussions with the Adani Group are ongoing to explore the best path forward for its development. Oman's willingness to keep options open demonstrates a diplomatic and pragmatic approach to collaborations, ensuring that decisions are made in the best interest of the port's long-term success.

Although a memorandum of understanding was signed in 2017 between Tatweer, the investment arm of Oman Company for the Development of Special Economic Zone at Duqm and Adani Ports, concrete plans have not yet materialised.

The 2017 MoU stipulated setting an official and resilient framework for investment and cooperation between the two parties and developing works in key sectors in SEZAD.

Adani Ports was expected to file a detailed report covering the projects it intends to set up in SEZAD and also determine the points of contracts and liaison between both parties to discuss all investment relevant topics.This needs to be urgently taken forward.

 The MoU was signed by Ismail bin Ahmed Al Balushi in his capacity as the Deputy CEO of the Special Economic Zone Authority at Al-Duqm on behalf of Tatweer and on Adan’s part, the MoU was signed by the CEO, Karan Adani.

The signing ceremony was witnessed by Sheikh Hamad bin Saif Al Rawahi; the Sultanate of Oman's Ambassador to India and other officials from both Oman and India.

The evolving nature of the Duqm Port development deal between India and Oman highlights the complexities and strategic considerations involved. Oman's approach aims to ensure that any agreement with the Adani Group or any other potential alternative aligns with the nation's vision for economic development and port infrastructure enhancement.

Adani Group is working on a commercial model of investment which needs to be backed by strategic realism on part of the Government of India. As the Port of Duqm overlooks the Sea of Oman, Indian Ocean, and the Arabian Sea, access to the Port makes it a key component of India’s maritime strategy.

Located to the north-west of the Indian Ocean, the Port provides easy access to India to the Red Sea as well, via the Gulf of Aden. This becomes critical today as the Houthis have created flux in the Red Sea with attacks on international shipping.

By way of conclusion, it may be pointed out that Indian investment in Duqm needs to be expanded beyond existing proposals made by the Adani Group.

Investments in infrastructure including hospitals, schools and residential buildings will develop the environment to make Duqm more inhabitable for those wanting to live and work in Duqm.

Private Indian hospital firms could be encouraged to show an interest in establishing a multi-speciality hospital in Duqm. Similarly, an Indian school could be established for the purpose of education of children of people employed to work in Duqm Port.

These steps would help take forward further development of the Duqm Port and its environs. The reason why India’s investments must go beyond the Port lies in the simple strategic rationale that the SEZ is an international gateway for trade and commerce.

India’s national interest thus demands a military and civil presence in Duqm, along with substantial investments in the SEZ. The way forward is for Adani Group to move towards implementation of the 2017 MoU. This will give a fresh boost to bilateral ties between India and Oman and assist in development of the Duqm SEZ.