Oman Ends Salalah Port Concession in 2028, Forcing Hub Rethink
Oman's government will not extend APM Terminals' concession to operate Salalah Port beyond November 2028, disrupting a key transhipment hub for major shipping alliances.
Oman's Ministry of Transport, Communications and Information Technology has finalized its decision not to extend the Salalah Port concession beyond November 1, 2028. The notification, described as final and unconditional, confirms the end of the existing agreements that date back to 1998 and cover the container and general cargo terminals.
Salalah Port Services Company, the concession holder, filed the notification with the Muscat Stock Exchange. The ministry will announce a new operator in due course but has not provided details on ownership or management, nor has it announced a formal tender process. APM Terminals operates the transhipment hub via a 30% stake in Salalah Port Service Co., stemming from a 30-year build-operate-transfer concession signed in 1996.
Port Performance and Capacity
Salalah Port handled record volumes following a major capacity expansion. A $300 million container terminal upgrade was completed in the first quarter of 2025.
The upgrade significantly increased the port's annual handling capacity.
| Metric | Before 2025 Upgrade | After 2025 Upgrade |
|---|---|---|
| Annual TEU Capacity | 4.5 million | 6.5 million |
This investment supported a surge in traffic. The port handled 4.3 million TEU in 2025, a 31% increase from the previous year. Container traffic was up 15% in the first half of 2025 due to increased vessel calls. General cargo volumes also rose by 17% to 26.4 million tonnes.
Half-year financial results to mid-2025 showed revenues of OR50.7 million ($132 million), up 20%. Profitability, however, declined. This was due to a one-off crane repair cost from an Iranian drone attack, fuel costs that were 72% higher, and increased staff requirements. The company's CFO, Farooq Zuberi, noted volumes for July and August were 'very strong' following the previous year's growth.
Stakeholder Structure and Ownership
The ownership of Salalah Port Services is split between international and local investors. APM Terminals holds a 30% stake and provides technical and operational support under separate management agreements. The Omani government holds a 20% stake through its logistics arm, Asyad Group.
The remaining ownership is distributed among other entities. The Social Cohesion Fund holds 10%. The Soros Fund Management LLP is the largest institutional investor with just under 20% ownership. The final 40% is split between other local and institutional investors.
Industry Implications
The concession end directly impacts major shipping lines that rely on Salalah as a strategic hub. Maersk and Hapag-Lloyd consider it a key regional node for their Gemini cooperation network. They have stressed the importance of controlling main transhipment hubs for their operations.
The port's centrality is clear from its service profile. It hosts 18 container liner services. Only two feeder services do not involve Maersk or Hapag-Lloyd. Recently, the port won new calls on a Gemini Asia-Mediterranean service that resumed Suez transits. The loss of the concession by APM Terminals raises immediate questions about operational continuity for this critical alliance.
An APM Terminals spokesperson commented on the situation, stating, "it was not the same as being able to conclude that APM Terminals’ involvement will be at an end." The company's board will assess the implications and update investors on material developments. For now, port operations and development work will continue throughout the remaining concession period until November 1, 2028.
