Port of Salalah transition puts $200 million equipment in focus

MUSCAT, OCT 18
Oman’s decision not to extend Salalah Port Services Company’s operating concessions beyond November 1, 2028 has put the treatment of about $200 million in leased equipment and longer-term commercial agreements in focus ahead of a change in operator.
The Ministry of Transport, Communications and Information Technology said on Sunday that a successor would take over after the existing concessions expire. The new operator will be announced in due course.
Salalah Port Services said in a disclosure to the Muscat Stock Exchange that it had received formal notification of the decision, which it described as final and unconditional.
Its board will assess the implications and potential impact on the business. The company has not disclosed an estimate of the financial consequences.
The ministry said operations and development activities would continue throughout the remaining concession period.
The Port of Salalah, on the Arabian Sea, is one of Oman’s principal maritime gateways and a container transshipment hub serving routes linking Asia, Europe, the Middle East and East Africa.
Among the outstanding commercial issues is the future of equipment leased during the port’s expansion programme.
During a discussion of the company’s 2025 financial results, reported by Observer in March 2026, executives said equipment worth approximately $200 million had been leased rather than purchased because of uncertainty over the concession’s extension.
Management said clarity on an extension would help determine whether to acquire the equipment outright or extend the leases, while supporting decisions on further investment.
The company has not disclosed how those assets will be treated when its concessions expire, including whether any equipment could be purchased or transferred under arrangements involving the incoming operator.
The equipment forms part of the investment context surrounding a $300 million container terminal upgrade completed in the first quarter of 2025.
The project included improvements to six existing berths, additional container-handling cranes, expanded storage yards and upgrades to electricity and access infrastructure.
It increased annual handling capacity to approximately 6.5 million twenty-foot equivalent units, or TEUs, from 4.5 million.
Other commitments extend beyond the current concession period.
OQ Base Industries’ audited financial statements for 2025 identify agreements signed with Salalah Port Services in May 2017 covering LPG storage and associated port facilities.
One agreement provides for the lease of 76,844 square metres of land within the port for an initial 30-year term, extending to approximately 2047, with provision for a further 10 years.
Related agreements cover access to port facilities and pipeline rights of way over similarly long periods.
The disclosures do not explain how those arrangements would be treated after the concessions expire. Their duration does not, in itself, establish that they will be terminated or adversely affected by a change in operator.
Salalah Port Services operates the container and general cargo terminals under separate concession agreements.
Its financial statements provide for fixed annual concession payments that increase by 3 per cent a year, alongside variable royalties.
Separate management agreements with APM Terminals cover day-to-day operations, with fees linked to container terminal revenue and general cargo handling volumes.
APM Terminals, part of the A.P. Moller-Maersk group, holds approximately 30 per cent of Salalah Port Services, while government-owned Asyad Group holds about 20 per cent.
The port handled 4.3 million TEUs in 2025, up 31 per cent from the previous year. General cargo volumes rose 17 per cent to 26.4 million tonnes.
The ministry has yet to announce the successor operator, details of the selection process or arrangements for the operational handover.