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Bahrain focus

In this special report, Christopher Sell looks at how the government is adopting an integrated approach to the ongoing development of the island.

ANALYSIS, Business

Few countries have benefited from the strengthening political confidence and increased commercial activity in the Gulf more than Bahrain.

Ever since the Lebanese Civil War drove out Beirut's large banking sector, the archipelago has enjoyed a reputation as a strong financial centre. And buoyed by strong communication and transport facilities, numerous multinationals have set up in Bahrain.

While 60% of the country's exports stem from petroleum production and refining, which accounts for 11% of GDP, Bahrain, like Dubai is diversifying its economy to reduce its dependence on oil (as the first state to exploit its resources in the 1930s, Bahrain will be the first member of the GCC to run out of oil). This was highlighted in August 2006, when Bahrain and the US implemented a free-trade agreement, the first between the US and a Gulf state. Financial and construction sectors are big parts of this. And Bahrain has a national ambition to strengthen and consolidate its position as a financial hub of the Middle East by 2030.

This is a new form of consultancy in my opinion, and one that is of vital importance.

To do this, however, the country is acutely aware of the ramifications of growth, especially if it has not been planned properly. As a result of earlier expansion in the country, the government of Bahrain has committed itself to a strategy of support with several key initiatives being taken to lend encouragement to current and future developments. Principle among these actions has been the drafting of a National Planning Development Strategy, or ‘National Plan'.

Completed in December 2006, the plan provides strong and clear guidance on 10 key strategies that will support the future development of Bahrain. These include the built environment, infrastructure, transport and the environment.

"In this region, particularly in Bahrain, we have fragmentation," says Dominic Mc Polin, executive coordinator, Office of the Minister, Ministry of Works & Housing. "The private sector is booming and the finance is in place to support private sector expansion, but the mechanics are quite difficult. So we have a philosophy that all infrastructure has to be integrated.

"Everyone knows this, everyone talks about this, but when you actually go on site - Dubai or anywhere - you will see a lack of integration," he adds.

What this plan suggests is that the government has accepted that clear implementation processes need to be in place and it has to adopt a change in the way it supports private sector developments. Too often, Mc Polin says, projects in Bahrain have been conducted in an insular fashion, being self-contained and highly specific in their concept. This has meant that some developments have evolved and placed undue strain on an unprepared infrastructure. This is characterised by sporadic demands for infrastructure, leading to uneconomical and fragmented responses by the authorities. It has been suggested that because of the lack of a centrally coordinated approval process and the absence of coordinated infrastructure policy, ongoing public infrastructure problems remain (see box - Al Areen).

But central to the government's aim of implementing the National Plan is a central planning unit (CPU). The body has adopted a policy of integration, seeking to form bonds between government ministries, non-ministerial government bodies, developers, private utility companies, the people of Bahrain and other stakeholders.

"This is a new form of consultancy in my opinion, and one that is of vital importance to the region," says Mc Polin. Where CPU differs, he says, is its emphasis on an integrated engineering infrastructure, which is such a departure from the conventional approach, that it can barely be considered under the same umbrella. "It isn't an organisation so much as a business model," he adds.

Zallaq bridge

This project comprises the construction of a seven-span bridge across Zallaq Highway together with the associated roadways. The project will extend the dual three-lane Sheikh Khalifa Bin Salman Highway southwards, from its current termination point north of Zallaq Highway, over Zallaq Highway and into the grounds of Bahrain University.

Each of the bridge superstructures will consist of a post-tensioned, in-situ reinforced concrete box beam over intermediate pier supports, to create an overall length of 240m between supports. This length will be decided by seven spans including two 25m end-spans, four intermediate 35m spans and a fifth maximum, intermediate span of 50m, bridging Zallaq Highway.

Essentially, the CPU is an inter-dependency model, where everyone who is involved with infrastructure, from engineers to utilities, are considered stakeholders. It is a non-line management organisation, which reports only at ministerial and cabinet level. "We are above the normal structures," says Mc Polin.

Its mission statement is the development of procedures and technologies for coordination of the planning and implementation of all infrastructure. "No one works outside the business model," he adds. "All public and private infrastructure comes through the CPU, without exception." In addition, the CPU conducts development control and has the interests of infrastructure at its core and looks after the technical and engineering side of things. "No land sub-division can be issued until I sign it," says Mc Polin.

Such tight room for manoeuvre means that the authorities take unlicensed work very seriously.

This policy of unifying all components and different government and administrative bodies lends a dependency to the work, ensuring the CPU operates as a cooperative business model, where one company must approve the others' work and vice versa. Hence communication is constant between parties - even if they do not see eye to eye to reach a satisfactory conclusion.

Unsurprisingly, with such dependency, companies do play the system, Mc Polin reveals. For example, a company may need approval, but won't deal with another firm until a technicality is cleared up. "They take hostages sometimes, it isn't allowed - it is against the rules, but we turn a blind eye," he says.

"So every second of every day, we have people buzzing, talking to each other, we enforce communication. Because we don't believe people are naturally cooperative, we believe people are naturally in conflict. But we make them depend on every one of them - each one depends on each other. And in fact, it actually works." This approach is all about technical transparency in the decision-making. And the belief that a collective voice is stronger.

A clear approach to infrastructure is integral, not just from an organisational perspective or for future growth, but the physical limitations of the island also mean that space for infrastructure works is severely restricted. The island is so small, meaning the underground utilities networks are extremely dense, especially electricity.

"You have a jet fuel line to the airport, gas lines to the power stations and electricity transmission coming of the power station. If someone gets out of place, he can black-out Bahrain for three months and you can kiss goodbye to your economy," says Mc Polin.

Another example saw a fibre-optic cable snapped as a result of a dead tree being removed, which was connecting the banking centre to the satellite station. As a consequence, all the banks ceased trading for 48 hours. In a country that is trying to promote itself as a banking centre, this illustrates how essential it is to protect its economy.

Such tight room for manoeuvre means that the authorities take any unlicensed work very seriously. So much so that it is considered a national security issue and ruthlessness is unavoidable. A road cannot be dug up without documentation and the benefit of the CPU model means that such action can be ‘booked' in advance - in some cases two years earlier - so it is a smooth process and no one is allowed into that space.

Northshore scheme

The Northshore area is broadly defined as the area lying between Seef and the western edge of Muharraq Island, bounding the King Faisal Highway. The Northshore is an area experiencing significant infrastructure development with a large number of independent and private and public projects currently ongoing or planned within the next decade. The development is estimated to be worth US $20 billion (BD 7.5 billion) in total.

Hyder Consulting Middle East was appointed by the Ministry of Works & Housing in November 2006 to provide technical assistance and support in respect of a programme of infrastructure development, both ongoing and planned, within the Northshore area of Bahrain. The company believes that the contract is unique within Bahrain and possibly throughout the Gulf - pioneering as it does a shift in the culture and practice of managing large-scale, multi-agency developments by the central government.

One aspect of the management team's task is the upgrade and expansion of the King Faisal Highway, which is the main artery running through the Northshore area.

Simulation studies have shown that the current design, which will see the north Manama causeway road, which extends from King Faisal Highway to Bahrain Bay and ties in with the Financial Harbour, experiencing severe traffic congestion, leading to considerable delays. Hyder Consulting has proposed a major improvement to the original intersection, advocating a three-level interchange to ensure traffic flows more smoothly. This proposal is currently with the Prime Minister and the Cabinet and an announcement is expected shortly.

"Our role is to advise the client of sustainable solutions," says David Yau, project manager, bridges, Hyder Consulting. "In terms of traffic solution, it [the interchange] suits Bahrain because that junction will become heavily congested. We have put a proposal to the client."

"Traffic is a complex issue. But it isn't just one body making decisions, it is a collaborative approach. The whole thing about traffic is it's a live model, which changes constantly depending on the loads put upon it," he adds.

This illustrates the need for developments of the size and nature currently being built and considered in Bahrain to be coordinated. "Bahrain's Northshore development plan will only be achieved by a coordinated, fully integrated, multi-agency approach to infrastructure. We are fortunate to be here now, because for the first time in Bahrain's history there is some sort of written vision for the future," says Brett Doughty, project director, Northshore Programme Management Team, Hyder Consulting.

This diligent approach has many advantages. Mc Polin explains that no one is allowed to cut a new road in Bahrain within two years of laying without the Minister's permission. What is the impact of this? It forces people to think. If the road has been laid, and then someone decides they want to install a duct or pipeline underneath the likelihood is, it will get rejected.

"It forces people to plan. If you have been lazy or stupid, then you won't get permission," says Mc Polin.

The CPU has been so effective that consultants from Qatar, Dubai and Yemen have approached the Ministry of Works & Housing in Bahrain with further enquiries about the model.

Brett Doughty, project director, Northshore Programme Management Team, Hyder Consulting, explains how the system works: "A typical approach would be for the developer(s) to come in and go through their initial concepts. We would go through it and check it fits with the national plan, ensure communication channels are in place and then start talking to directorates and ensure that forward planning comes in."

Current concerns, says Doughty, are power, water and district cooling, especially as they require large pipes - not easy when the landmass of Bahrain is small and the underground infrastructure is congested. "Fitting 1.82m diameter pipes in a road corridor is a real nightmare."

But do people appreciate being told what to do? "They are encouraged that at long last there is someone they can go to. We are trying to bring all parties together - there has been an element of isolationism until now. We want to give something tangible back to the people of Bahrain. But I am not here to pressure people, I want people to buy into ideas by presenting an open argument," adds Doughty.

Abbas M. Allay, CPU, Ministry of Works & Housing, adds that it isn't just burgeoning infrastructure that brings greater interest in such consultative approaches but also maturing political expectations. "The complexity of services underground is growing, the demand is growing and now we have democracy in Bahrain, which means there are questions if things go wrong."

While the National Plan has not been officially launched, according to Doughty, it is being consulted in assessing all current and future projects. Certainly, if the CPU model can ensure the National Plan is adhered to smoothly, and the disparate elements of a country experiencing rapid expansion can be brought together with minimal conflict, then it surely won't just be Mc Polin who is lauding the system. Masterplanners, consultants and government ministries from the wider region will be keeping a close eye on Bahrain for the evidence either way.

"Leadership is very easy in a situation like this," Mc Polin concludes. "It is the same in Dubai, because everybody is hungry for the way forward. If you look at some projects, they cannot go forward as they are not sure about something that is someone else's responsibility. Here we are stitching them up, bringing them together and providing a conduit. It is all about interface management and identifying interfaces."

Al Areen

Built over 2 million m2, Al Areen, located in the south of Bahrain, close to a wildlife sanctuary, is a mixed-use health, residential and family tourism development, which strengthens the image of Bahrain's maturing and diversifying economy. Featuring a spa-resort, water park and range of residential, commercial and recreational and entertainment facilities, the development is estimated to cost over $1 billion.

The site is split up into 16 clusters, which include: Downtown Al Areen, a $360 million mixed-use development with a shopping boulevard surrounded by commercial and residential facilities; Sarab Al Areen, a commercial hub positioned at the northwestern tip of the development next to the F1 circuit; and Al Waha Resort, a family-friendly project with a mix of recreational and residential facilities costing $100 million.

According to Emyr Rowlands, assistant project manager, Hyder Consulting, however, the project echoes numerous projects in the region in terms of poor infrastructure planning and access to utilities, emphasising just why a national plan is relevant.

"In the short term, the ministry hasn't been able to deliver water. It has been applied for, but basically it is so far away from the main infrastructure. We expect to be connected by the end of next year," says Rowlands. "It is more of a problem here, because it is so far away. It is poor planning basically."

Rowlands adds that since the beginning of 2006, the government began imposing capital contributions on private developers for the provision of services to new developments. This is due to the rising number of new developments on and off the island coupled with the concern over the national grid, which during the summer months is running at 110% capacity.

This money has two uses: to create a revenue stream which allows investment into reinforcing the existing networks as well as providing delivery to the new development.

Al Areen Holding, in consultation with the Ministry of Electricity and Water came to an agreement regarding the capital contribution, which totalled $26 million. This funded a bulk substation (220kV) and two primary substations (66kV). The project is due to be finished in 2011.

Al Areen Holding Company was formed in July 2004 as a joint stock company owned by the Government of Bahrain, Gulf Finance House BSC and strategic regional investors.

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