Bahrain plans to privatise Gulf Air, other services

Bahrain plans to privatise the country's loss making carrier Gulf Air within about a year, after its turnaround programme bears fruit, said the chief executive of the top economic planning body in the Gulf Arab state.

Bahrain also plans to privatise other public services, from hospitals to waste management, as it seeks to diversify its economy from oil and build up a viable private sector and a tax based economy.

Gulf Air, which said in November it expected making an operating loss of about $500 million in 2009, plans to return to profits by focusing on regional routes and cutting costs.

Speaking to Reuters, Sheikh Mohammed bin Essa al Khalifa, head of the Economic Development Board, said: "The intention is to privatise but if you're going to privatise something, people want something that doesn't have a hundred tonne anchor weighing it down."

He added: "It will take realistically a year." (Reuters)

The Economic Development Board controls all government decisions on economic policies, making Sheikh Mohammed the small island kingdom's top policy maker in economic matters.

Management of the King Hamad Hospital, currently under construction, and of petrol stations owned by state run Bahrain Petroleum Co (Bapco) could be tendered to the private sector at the end of the year.

Contracting out management of postal services and waste water treatment was currently under study, he added.

The country is also planning to phase out subsidies in the long run to relieve public finances, a sensitive issue that has sparked protests.

Ending gasoline subsidies is the biggest bone of contention, and Sheikh Mohammed said these would not be touched any time soon.

He said: "Fuel prices are not going up any time soon."

Bahrain plans to target other subsidies, including on electricity, to only the needy instead of all consumers, but that would be a gradual process taking some years, he added. (Reuters)