Bahrain - Country Commercial Guide
Construction and Infrastructure

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-28

Overview

The International Trade Administration identifies construction as a leading sector for opportunities for U.S. firms.  According to Bahrain’s Information and E-Government Authority (IGA), Bahrain’s construction sector contracted by 0.9 percent in 2020.  The sector remained resilient in the face of macroeconomic shocks, including the COVID-19 pandemic and the collapse of world oil prices.  A key driver of this continued growth is a $32 billion infrastructure investment pipeline comprised of $10 billion in government funding, $7.5 billion from the GCC Development Fund, and $15 billion from the private sector.  According to the Ministry of Finance and National Economy, projects with a total value of $877 million were awarded in 2020, increasing the value of all awarded projects to $26 billion by the end of 2020.  This emphasis on construction is consistent with the Kingdom’s Vision 2030 economic development strategy.  The strategy seeks to improve infrastructure, industry, housing, and connectivity and this calls for a more diverse economic base, with broader privatization, industrialization, training, and education of Bahrain’s national workforce.

Large-scale government infrastructure projects continue to stimulate the sector and have positive spillover effects in supply industries.  The government’s major projects include:

  • The $4.2 billion Bahrain Petroleum Company (BAPCO) modernization & expansion project
  • The $3.5 billion King Hamad Causeway transportation infrastructure project
  • The $2 billion Bahrain Metro Project
  • The $1.1 billion Bahrain International Airport Modernization Program
  • A new $355 million gas processing plant
  • Major housing and resort projects estimated at $2.2 billion
  • Electricity and water delivery projects estimated at $1.1 billion
  • Road and sewerage infrastructure projects estimated at $900 million
  • Construction of roads, sewage networks, and electricity connection systems for three planned cities
  • The $222 million Bahrain International Exhibition and Convention Center
  • The U.S. Trade Zone

A number of other projects underway focus on education, health, social development, youth, sports and industry, many of which will be funded by grants received from Bahrain’s wealthier neighbors via the GCC Development Fund.  The government is currently implementing the National Development Strategy 2019-2022 to ensure economically and ecologically sustainable growth and to better respond to the needs of citizens and the economy.

Leading Sub-Sectors

The demand for small housing units for low and medium-income families has increased dramatically in recent years.  There are approximately 60,000 Bahraini families on the government’s waitlist for subsidized housing.  The government is pursuing an ambitious program of developing 40,000 housing units within the next decade.  Close to 20,000 units are under construction.  The major housing projects are East Hidd City, Diyyar Al Muharraq, Tubli Gardens, Argan, East Sitra, and the Naseej project in Northern City.  The Ministry of Housing has also launched a social housing financing program to support the home purchases of Bahraini nationals.

In the private sector, major new freehold real estate projects have been launched in Diyar al Muharraq, Dilmunia, and Durrat al Bahrain.  Among others, a 3,000-unit Deerat al Oyun project has commenced in Diyar al Muharraq.  Construction work on the $650 million Villamar project at the Bahrain Financial Harbour in central Manama is also resuming.  Government-funded projects in the fields of energy, industry, and transportation have also been major drivers in the construction sector.

Opportunities

One of the largest projects within this pipeline is the $1.1 billion Bahrain International Airport Modernization Program.  The main contract was awarded to a consortium led by UAE’s Arabtech Construction and TAV Construction in early 2017.  A number of U.S. firms have won smaller sub-contracts as part of the overall expansion project.  Phase one was completed in early 2021 and nearly doubled the airport’s passenger capacity to 14 million passengers a year.  Follow-on phases and new project opportunities include the construction of a maintenance repair and overhaul hanger, the refurbishment of the VIP aviation terminal, and, as part of the Bahrain Metro Project, the installation of a passenger station connecting the airport to downtown Manama.

In March 2021, Bahrain’s Ministry of Transportation and Telecommunications organized a virtual market sounding event that showcased the $2 billion Bahrain Metro Project to regional and international investors, ahead of an international tender planned for early 2022.  The project is expected to deliver a 109 km light rail system which carries over 43,000 travelers per hour and includes four separate lines with two interchanges and more than 20 passenger stations.

The King Hamad Causeway is also planned, with construction expected to start in 2024.  This new rail and road causeway project connecting Saudi Arabia and Bahrain overland will run parallel to the existing 25km-long King Fahd Causeway and deliver new lanes to support additional passenger and cargo traffic, as well as a rail line to link Bahrain with the main GCC railway and existing Saudi rail network.

In January 2021, the U.S. Department of Commerce and Bahrain’s Ministry of Industry, Commerce, and Tourism (MoICT) signed a Memorandum of Understanding (MOU) to establish a United States Trade Zone (USTZ) within Bahrain’s sovereign territory.  MoICT selected the USTZ location near Bahrain’s Khalifa bin Salman Port and other industrial and logistics facilities, and within a short distance to Saudi Arabia via the King Fahd Causeway.  Design planning for the land reclamation and construction phases is underway and MoICT expects the USTZ to open within 2-3 years.

 Despite the pandemic-induced global economic downturn which led to a contraction in Bahrain’s manufacturing sector by 4.5 percent, state-owned companies are proceeding with building out critical economic infrastructure and landmark heavy industry projects in downstream hydrocarbons and aluminum, include the BAPCO modernization and expansion program.

Bahrain’s tourism and real estate development strategy also extends to medical-tourism projects, such as the construction of the $300 million King Abdullah Medical City Hospital which is expected to open in early 2022, the ongoing construction of the new $66 million King Hamad American Mission Hospital which is expected to open in late 2022, and the launch of mixed-use real estate projects at Bahrain Bay, Bahrain Marina, Diyar Al Muharraq, Water Garden City, Dilmunia, Thai Mart Bahrain, open-air El Balcon Mall, and Marassi Al Bahrain.

 Other key tourism developments expected to be completed in the near-term include:

  • The $120 million Muharraq Water Front Project (Saada), consisting of retail establishments, a marina, entertainment facilities, a 4-star hotel, a multi-story car park, and a traditional souq.
  • The mixed-use Bahrain Marina in Manama, consisting of a five-star hotel and hotel suites, apartments, villas, a shopping mall, entertainment and educational facilities, retail space, and a yacht club with space for 250 boats.
  • The multi-million dollar seafront mixed-use tourism and recreational Bijlaj Al Jazair project in Zallaq, delivering public beach access, food and beverage outlets, entertainment facilities, and hospitality services, as well as a four-star hotel, branded boutique hotels, and residential apartment buildings planned for later phases.

Resources

Bahrain Tender Board - www.tenderboard.gov.bh

Bahrain Economic Development Board - www.bahrainedb.com

Bahrain Ministry of Works, Municipalities Affairs and Urban Planning – www.works.gov.bh

Bahrain Ministry of Housing – www.housing.gov.bh

Bahrain Ministry of Industry, Commerce, and Tourism – www.moic.gov.bh

Bahrain Ministry of Transportation and Telecommunication – www.mtt.gov.bh

Bahrain Information and eGovernment Authority – https://www.iga.gov.bh/en/