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The Duqm Port, Oman and the Three Global Powers: China, USA, and India

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The Duqm Port, Oman and the Three Global Powers: China, USA, and India Image Courtesy: Getty Images C3S Issue Brief I The Duqm Port, Oman and the Three Global Powers: China, USA, and India By Arjun Gidwani Research Intern Chennai Centre For China Studies March 7 2020 About the Author: Arjun Gidwani is currently an International Business Analyst based in Hyderabad and has more than 10 years of experience in Market Research, Industry and Sector Analysis, Trade analysis, Macroeconomic forecasting and Financial Analysis. He has earned his postgraduate degree from the Indian Institute of Foreign Trade (IIFT), Delhi and has also completed his studies in Advertising Management and Public Relations from MICA, Ahmedabad. Specializing in research and strategy, he has worked on market entry strategies for Indian manufacturing companies into new geographic markets with a focus on the Middle East and North Africa (MENA) countries, revenue generation strategies for a Hyderabad based consultancy, and has been a member of the policy drafting Race Committee for the Dubai World Cup – Horseracing. About C3S: The Chennai Centre for China Studies (C3S), registered under the Tamil Nadu Societies Registration Act 1975 (83/2008 dated 4th April 2008), is a non-profit public policy think tank. We carry out in depth studies of developments relating to China with priority to issues of interest to India such as geopolitical, economic and strategic dynamics of India-China relations, Chinas internal dynamics, border issues, Chinas relations with South Asian countries, prospects of trade, the evolution of Chinese politics and its impact on India and the world, ASEAN and SAARC relations, cultural links, etc. C3S attempts to provide a forum for dialogue with China scholars in India and abroad and give space for the expression of alternate opinions on China related topics. We also provide a database for research on China with special attention to information available in Chinese language. Additionally, events, lecture discussions and seminars are organised on topics of current interest. What is an Issue Brief? C3S launches its Issue Brief initiative. The reports under this series analyse the status and developments of current scenarios in detail. They attempt to aid the reader to get a more comprehensive idea of the issue being addressed through a detailed illustration in the form of images, data and facts Issue Maps are available for download as PDFs. Abstract: The Duqm Port is situated out of the Strait of Hormuz, in the middle of the Indian Ocean, opening directly into international waters and lies in the vicinity of the international trade route between Asia and Europe. The Duqm Port has a special importance as it lies along the Strait of Hormuz, Gulf of Oman, Indian Ocean and the Arabian Sea. The location is strategic as not only is it close to countries like Pakistan and India in South Asia; it is also easily accessible from East Africa. Oman joined the Belt and Road Initiative in 2018, thereby acquiring additional importance as China’s first base station in the Gulf. The China- Oman (Duqm) Industrial Park, a megaproject under the BRI that is nearing its first phase of completion is evidence of China’s interest in developing Duqm with the view to link several continents with the logistics and infrastructure built with Chinese investments. In March 2019, the United States signed an agreement with Oman to allow US military access to Omani facilities and ports in Duqm and Salalah. This article seeks to: - Understand the geography and demography of Oman and define the role played by the Duqm Project in the development of the Sultanate. - Understand the history, country-wise, of bilateral relations of China, USA and India with Oman and study their respective involvement in Duqm. - Define India’s current strategic position in the region, vis-à-vis US and China, through an analysis of the impact of its presence in the Duqm Port by studying the factors favorable and unfavorable to it. The Sultanate of Oman: Understanding the Geography The Sultanate of Oman is situated in the southeast of the Arabian Peninsula, bordering the United Arab Emirates, Saudi Sultanate of Oman (Political) source:mapsofworld.com Arabia, and Yemen. Its coastline extends for 3,165kms with an area of 310,000 sq. km. It is the third-largest country in the Peninsula with a population of 4,177,221 of which 2,332,243 are Omani nationals and 1,884,978 are expatriates. Muscat is the capital of Oman. Oman is divided into 11 Governorates (Muhafazah): Muscat, Musandam, Dhofar, Al Buraimi, Al Batina North and South, Ash Sharqiyyah North and South, Al Wusta and AdhDhahirah. These governorates are further divided into 61 administrative divisions/provinces referred to as Wilayats. Duqm or Ad Duqm (Al Duqm), is one of the four Wilayats of the Al Wusta Governorate. The Al Wusta Governorate The governorate possesses a long and curving coastline. It is characterized by sandy beaches stretching for miles. Al Wusta is flanked by the Arabian Sea on the east, the Rub Al Khali (The Empty Quarter) on the west and the Dhofar governorate to the south. The Al Wusta Muhafazah consists of four Wilayats or provinces: Haima, Duqm, Mahout and Al Jazer. Haima is the capital of the Al Wusta Governorate. The settlements in the Al Wusta region are much smaller in comparison to the rest of Oman. As per the 2016 data of the National Centre for Statistics and Information (NCSI), Sultanate of Oman, the number of households in Al Wusta Governorate was just 7,174, which forms just 1.31% of the total households in Oman. NO. OF HOUSEHOLDS IN THE AL WUSTA GOVERNORATE AS A PERCENTAGE OF THE TOTAL NO. OF HOUSEHOLDS. Source: NCSI, Sultanate of Oman NO. OF HOUSEHOLDS IN THE 11 GOVERNORATES OF OMAN (2016) SOURCE: NATIONAL CENTRE FOR STATISTICS AND INFORMATION, SULTANATE OF OMAN Source: NCSI, Sultanate of Oman Wilayat AlDuqm Duqm (Al Duqm or Ad Duqm) is a port town on the Arabian Sea, a district of the Al Wusta Governorate located in central-eastern Oman. It was a small fishing settlement of the Janubah tribe on the southern coast of Oman. It is about 480 km from the capital of Oman, Muscat. In February 1954, a party of soldiers of the MOFF (Muscat Oman Field Force) and geologists of the PDO (Petroleum Development Oman) arrived in Duqm and began the modern oil exploration of Central Oman. It is about 480km from the capital of Oman, Muscat. Source: ias4sure.com The Duqm Port is located on the southeastern seaboard of Oman, overlooking the Arabian Sea and the Indian Ocean. It is situated out of the Strait of Hormuz, opening directly into international waters and lies in the vicinity of Source: Google Earth the international trade route between Asia and Europe. The Duqm Port is fast becoming an important part of the rapidly transforming Maritime landscape in the Middle East. Duqm Port Special Economic Zone The Duqm Port is set within a Special Economic Zone (SEZ) which covers a land area of 2000 sq. km and 90 km of coastline along the Arabian Sea. The Duqm SEZ is the largest in the Middle East and North Africa Region (MENA) and among the largest in the world. DUQM SPECIAL ECONOMIC ZONE AUTHORITY – SEZAD Source: duqm.gov.om The Special Economic Zone Authority at Duqm (SEZAD) The development, management, and regulation of the Duqm SEZ is overseen by the Duqm Special Economic Zone Authority (SEZAD). SEZAD is a statutory institution empowered under the Royal Decree with regulatory, administrative, fiscal and economic responsibilities within Duqm. The Duqm SEZ is managed by a chairman with a Ministerial Rank. The Royal Decree grants SEZAD: - The regulation rights of the SEZ - Registration of projects as per the Commercial Registration Law - Licensing of tourist projects - Issuance of environmental permits - Implementation of environment protection and anti-pollution law by taking necessary environmental measures In 2013, SEZAD established its development/commercial subsidiary, Tatweer, which is the Omani company for the development of the SEZ. The primary responsibility of Tatweer is to provide project management services for all SEZAD funded projects in the SEZ. Within the SEZ, the development of Duqm Port is being financed by the Omani government from the Sultanate budget and in conjunction with a loan of USD 265 million from the Asian Infrastructure Investment Bank (AIIB). The Port of Duqm Company (PDC) is the port authority for the Duqm Port, which is a 50-50 joint venture between the government of Oman and the Consortium Antwerp Port. The PDC has a concession contract with SEZAD for 28 years to co- invest, develop, manage and operate the port. Subsequently, the development will be done in line with the “Oman Vision 2040”. Recently the government has also simultaneously established a separate entity, Oman Dry dock Company (ODC). SEZ Development The SEZ includes the following functional zones: - Duqm Port; a deep-water port - A dry dock - A regional airport - A heavy/medium and light industries complex, including a refinery and petrochemical complex - A residential and commercial area - A tourism area - A logistics services area - An industrial fisheries complex with a port The Duqm Port entered into its early operations phase in 2012 and currently remains in this stage with a fully functional commercial quay capable of handling heavy-lift project cargo, general cargo, dry bulk, and containers. The security, commercial gate, and customs areas are currently under construction. The land- side infrastructure is expected to be in place by mid-2020, along with the liquid berth and liquid storage areas on the lee breakwater, which is currently under development by Duqm Refinery. The wide range of services offered by the Duqm Port include the availability of marine pollution prevention facilities (MARPOL at the dry dock), freshwater supply, fuel bunkering, and domestic waste collection and treatment facilities.
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