City Profile: Manama, Bahrain
The packed city on the tiny Kingdom of Bahrain offers opportunities
The packed city on the tiny Kingdom of Bahrain offers opportunities for newcomers, but there are also pitfalls for those who are not aware of the ways of the Gulf’s self-styled ‘Pearl Island’.
For the most part, the tiny island of Bahrain is empty, but for a few square kilometers, the place is packed with people, machinery and extravagant building projects. Like the other GCC countries the tiny island spent much of the twentieth century diversifying away from pearling, fishing and the yolk of British rule, and into an oil-based economy.
Today sees the nation changing again, as tax incentives make the country a haven for the offshore banking industry, as well as having a developed construction industry and attractions such as a fully-fledged F1 track.
In fact, the importance of taking advantage of all revenue streams was underlined in the National Economic Vision 2030 plan, which was launched with great fanfare this time last year, just as the recession was starting to bite.
Unfortunately the downturn did hit Bahrain very hard, with one report putting the number of shelved projects since last October at around 30%. This obviously has had a drasic effect on both contractors and investors alike – most of whom are waiting for their money.
From our perspective as fleet managers, perhaps the most interesting industry in Bahrainis the transport sector. While the other countries still moot the idea of 100% foreign ownership of companies, Bahrain already does it, which has lead to the recent opening of a new industrial area, as well as a new seaport capable of handling the largest ships.
Steen Davidsen, manager of APM Terminals Bahrain said “Bahrain itself offers benefits for businesses, including a number of free trade agreements, a liberal tax eegime and the allowance of forign ownership. Operating from the port makes clear economic sense and being 40% closer to the upper Gulf ports saves money for shipping lines.”
“Bahrain has invested billions of dollars to develop the best transport links in the region, incorporating road, sea and air.”
He added: “Our strategic location can provide companies with road access to the booming economies in the Gulf, supported by the 25km causeway to Saudi Arabia and the forthcoming Friendship Causeway to Qatar, which is scheduled for completion in 2013.”
There is no railway on or near the island, so the freight needs to be moved by road, usually on the back of a trailer pulled by a middle-aged truck head. There is evidence that the industry is modernising though, as the recently-formed Bahrain Logistics Zone, with large fleet operators such as Danzas and CEVA starting operations.
Currently, the only roadway on or off the island is the causeway into Saudi Arabia. This is often busy, as Saudi customs are notoriously slow and most truck drivers will have horror stories about being stuck for many, many hours.
Steven Gomes from Bonaventure in Dharan noted that: “Trucks lined across the Saudi-Bahrain Causeway on both sides of the border present logistical nightmares for business, custom authorities, not forgetting the endless waiting times for the trucking crew to get across.”
Gomes also observed that waiting in the stifling heat (temperatures have been known to hit 52 degrees) was having a bad effect on the heath of the truck crews – something newcomers to the island should consider.
Of course, there is very little that can be done about there being only one way out of the country, but is does make moving trucks, machinery and people somewhat harder. It should be noted though, that the lot of the Bahrani-based trucker is generally better than that of his Saudi counterpart in terms of wage, living conditions and workers’ rights in general.
Oil and Gas
It would be churlish to write about Bahrain without mentioning the rebounding energy sector. Recently Dr Abdulhussain Mirza, the oil and gas affairs minister for Bahrain has said that the kingdom is planning to invest US$20 billion in the development of its hydrocarbons sector.
As US$5bn of this will be used to bring existing facilities up to date, it is likely that there will be work for heavy lift subcontractors, as well as work for regular cranes and equipment.
“We have started in earnest the modernisation process in Bahrain over the last few years after Noga came into existence in 2005,” Dr Mirza is reported as saying in a recent interview.
“The process is now well and truly under way with offshore drilling for oil set to begin by the oil giant Occidental, in the very near future,” he added.
Besides the road network, Bahrain has reasonable infrastructure, but it is clear that it is struggling with what the island’s ambitious plans demand. The power grid, for example could just barely cope with the load put on it over the summer. Works Minister Fahmi Al Jowder recently that efforts were underway to limit the problem.
“People shouldn’t be blaming us for the cuts because the weather then reached 52C and I don’t believe any machine can withstand it,” he said, adding: “Yes, we are trying to limit cuts, but it is impossible to stop them because anything may go wrong with the machines or
There were ambitious plans to develop the Tubli power plant, but the economic crisis has put this on hold for the time being at least.
Though the country prides itself on it’s human rights record, and that employees are allowed to unionise and are not sponsored by their employers, it must be noted that Bahrain lags behind the UAE in terms of employee protection.
Workers are still routinely carted about in open trucks, despite a ban on the practice. More seriously, cramped, overcrowded living quarters, with no proper cooking facilities have resulted in a number of horrific fires recently.
Apart from this, some contractors have been caught doing the most shocking HSE violations. One was found to be using workers as counterweights when proof loading an elevator. Lead contractors are advised to watch subcontractors carefully for this kind of practice.
Bahrain – Fast Facts
Religions: Muslim 82% Christian 9% Other 9%
Languges: Arabic, Farsi, English, Urdu
Labour force: 352,000
Industries: Oil and Gas, Aluminum smelting, chemicals, offshore banking & financial services, ship repairing, tourism
Imports: Crude oil, machinery, chemicals
Import: Partners KSA 37.6% Japan 6.8% US 6.2% UK 6.2% Germany 5.2%, UAE 4.2% (2006)
Factsheet: Kalifa Bin Salman Port
- Opened April 2009
- Wide range of port handling equipment, notably ZPMC rail mounted cranes.
- Capacity of 1.1 million TEU (containers) Possibility of expanding up to 3 million TEU These all need to be moved by heavy trucks.
- Allows easy movement of machinery, parts and other freight to Saudi and Qatar, as well as to new markets such as Kuwait and Iraq.
- Adjacent to a large industrial area.