The Oman government announced that it will end the Maersk operator contract at Salalah port, and this contract will not be renewed after its expiration date in November 2028. This decision was made following multiple negotiations with Salalah Port Services Company (SAOG), which recently received a notification from the Ministry of Transport, Communications and Information Technology of Oman (MTCIT) confirming the end of this contract.
Details of the contract termination
The notification emphasized that the ministry's decision is final and unconditional. MTCIT also stated that normal port operations will continue uninterrupted until the end of the remaining term. The government is expected to introduce a new operator in the near future.
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SAOG, managed by APM Terminals, part of the A.P Moller-Maersk group, holds 30 percent of the company's shares. The Oman government also holds another 20 percent of the shares through the national logistics company Asyad Group.
Background and impacts on SAOG
SAOG received a 30-year contract in 1998 to manage container and general cargo terminals. The company has also signed separate agreements with APM Terminals for technical and operational support throughout the contract period. However, the SAOG board is reviewing the impact of this decision on its business and has expressed hope to receive a contract extension based on its track record.
In the first quarter of 2025, SAOG completed a $300 million terminal upgrade, which included improvements to all six existing berths, a new access road, expanded refrigerated sockets, and a new power station. This upgrade increased the terminal's loading capacity from 4.5 million TEU to 6.5 million TEU.
With the recent decision not to renew the contract, it is unclear whether equipment lease contracts will be affected by the operator transition. SAOG opted to lease equipment during the upgrade due to uncertainty regarding its contract status at Salalah port.
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