By Oxford Business Group
Major upgrades to the kingdom’s ports and roads as part of a long-term drive to strengthen logistics are raising the prospects of job creation and the interest of foreign investors.
Last month the General Organization of Sea Ports (GOP) invited bids for the construction of a service zone at the Khalifa bin Salman Port (KBSP).
The planned service area will include warehouse facilities, office space, a multi-level car park and a petrol station.
“As a strategic component of the state-of-the-art KBSP, the service area will provide all tenants and companies operating with a comprehensive and supportive business environment,” Hassan Ali Al-Majed, director-general of GOP, said in a November 2010 press release.
Measuring 41,817 sq meters, the new service area will provide 105 offices and 4000 parking spaces. Construction is planned to start by June 2011 and be complete by May 2013.
KBSP covers approximately 110 ha of land in the north east of Bahrain, and began operations in April 2009. The port is strategically based near sub-regional ports and Bahrain International Airport. KBSP boasts new, fuel-efficient equipment, an 1800-metre quayside, maximum quayside depth of 15 meters and a road network.
The Bahrain Logistics Zone (BLZ), a logistics area located 3 kilometers away that the firm describes as a “boutique” operation due to its re-export and value-adding activities, will soon compliment the port. Scheduled to open in 2011 the BLZ is already gaining attention. In June it was ranked ninth out of the top 25 future free zones named by Foreign Direct Investment magazine. It is expected to attract investments worth BD100 million ($265.5 million) and create 2400 direct jobs.
The port organization says KBSP has performed well in its first year of operation. GOP noted in a press release issued in May that the handling of 20-foot (6.1 meter) equivalent units had increased by 13.2 percent, while berth productivity rose at a rate of 82.1 percent and gross crane productivity improved by 65.9 percent.
“Despite the decline in world trade, KBSP’s first year results represent a quantum leap for Bahrain in the area of maritime shipping and logistics,” Al-Majed said in the press release.
If all goes as planned, the new service area will further facilitate business for both the port and for the kingdom’s logistics industry as a whole. This dovetails well into Bahrain’s long-term economic development plans, known as “Vision 2030”. The kingdom intends to target logistics as an oil-independent driver of economic growth, and has invested BD136.3 million ($361.8 million) in KBSP.
The long-term development plan has also targeted improving road infrastructure, and projects are underway to ease issues such as the heavy traffic that often clogs the King Fahd Causeway. Rising congestion and a relatively time-consuming Customs process at the border of the 25-km causeway, which connects Bahrain with Saudi Arabia, have reduced the link’s efficiency.
The King Fahd Causeway Authority (KFCA) announced plans to ease traffic in July with seven departure lanes and five arrival lanes to be added, bringing the total number to 17 and 18 respectively. Further efforts have been made to speed up the Customs process by installing x-ray devices and gates.
Aiming to reduce congestion and delays in other parts of the country, Bahrain’s 2010 budget for road projects is a record BD152 million ($403.5 million). Perhaps one of the biggest achievements of the year has been the completion of the Sitra Bridge and Umm Al Hassam Junction.
Connecting the capital, Manama, with Sitra Island, the new bridge will replace two older bridges. The bridge will include three lanes each way with space available on each side for a fourth.
The planned causeway linking Bahrain and Qatar represents further progress for the road system. Stretching 40 kilometers, it will reduce driving time to Bahrain’s northern neighbour by 30 minutes, upgrading the kingdom’s intra-regional trade position. Completion of the causeway has been delayed until 2015 in order to accommodate the addition of rail services. Price negotiation has also contributed to the postponement.
These improved road links will further support the potential appeal of the upgraded port to international and domestic shipping and logistics companies. Although uncertain economic conditions worldwide present challenges for the kingdom’s vision of becoming a logistics centre, investments like these are keeping it on the right track.
