By Ben Millington
Bahrain's Minister of Works and Minister in charge of the Electricity and Water Authority HE Fahmi Bin Ali Al Jowder sat down with CW to discuss the government's big projects, the current focus on Public Private Partnerships and the future role of renewable energies.
Bahrain's Minister of Works and Minister in charge of the Electricity and Water Authority HE Fahmi Bin Ali Al Jowder sat down with CW to discuss the government's big projects, the current focus on Public Private Partnerships and the future role of renewable energies.The ministry began a significant programme towards self improvement in 2002. What were the outcomes?
It firstly helped set out a strategic path for the ministry for the years to come. It also brought about a significant restructure. We involved an international consultant to look at the duties of the ministry and try and come up with a formula that would allow us to best meet the expectations of the government and the people of Bahrain. Without that we would be limping now and we wouldn't be able to move forward with our huge programme of work.
Was there also a significant push towards increasing project management skills?
Yes, we decided to focus mainly on project management and give out all other works to the private sector. This not only helps the growth of the private sector but also allowed us to be more focused on delivering our projects. Now we are probably the only ministry in the Middle East to have a project management methodology which covers all our work, whether it's construction, procurement or any other project. The ministry also has a larger number of PMI certified project management professionals than any other organisation in Bahrain, which is something I'm very proud of.
What is the next stage of the plan?
We are now moving into the third and final phase which will improve our IT systems. We have signed a deal with AECOM, which is around BHD1 million (US $2.65 million), to develop software that will automate all project management steps that we are taking.
How did the role of privatisation feature in the Ministry's strategic planning?
In 2004 we determined that Public Private Partnership is one area that we needed to focus on greatly and we signed a deal with KMPG to plan the legal and administrative framework of the different services. But with the recent launch of the 2030 Economic Vision of Bahrain our plans now come under a national framework for privatisation. We had a bit of a head start and the national strategy is making it much easier.
We are now seeing the first privatisation projects roll out; can you run me through them starting with the energy sector?
The first project is Al Dur Water and Power Plant, which is being developed by the private sector for the government and has been fully subscribed. We're expecting the plant to begin producing water and power in June next year and achieve full production the following year. For that reason we have to start rolling out a new transmission network over the next five years. It is a substantial programme, around BHD500 million of which will be funded by the private sector.
And in the sanitary sector?
Very recently we had the bid conference for the Muharraq Waste Water Treatment Plant, which is the beginning of privatising the sanitary sector in Bahrain. We have prequalified 16 consortiums and I think we have ended up with 11 bidding on the project which is very good and we should get a competitive price. We have signed a deal with GTZ, a consultancy in Germany, to work on the financing master plan. We also have a consortium of HSBC, Fitchner and Norton Rose, who are doing the privatisation master plan for sanitary services in Bahrain. The next plant will be in Tubli, which could go out to tender this year and we also have plans to build plants in Al Dair and Zallaq over the next 10 years.
And in the roads sector?
Hopefully in the coming few weeks we will witness the first private funding of one of our roads projects, the North Manama Highway that will link the north of Manama with Muharraq though Bahrain Bay and Bahrain Financial Harbour. It is in the awarding stage, we are just waiting for confirmation from the Ministry of Finance and then we will approach the tender board to award the contract. The bids have been lower than the estimate by about $37 million, which is the other face of the coin when it comes to the financial crisis.
How are the roads projects privatised? By tolls?
Privatisation takes on many shapes and forms. We are not looking at tolls but trying to look at alternate mechanisms for financing using private sector assistance and funding. It's still under discussion, but it will either be by the issue of Sukuks, bonds, construction funds or by direct lending. We have given some proposals to the Ministry of Finance.
Is there any shortage of funding available from the private sector?
I believe the interest is still there. Lenders and financial institutions are looking to lend to governments these days because it's much safer. Everyday we get a proposal from a bank or funding institution that says they are willing to lend.
So there should be no problems securing finance for Bahrain's proposed monorail project?
If we go to the private sector I don't think there will be any problem, but we are only entering the second part of the study. We have a priority to start two lines, a red and a green line, and the second study will look at the exact corridors and locations of stations. It will also go into detail about how the project should be financed. There are an infinite number of ways to finance it; we just have to select the most appropriate.
What is the timeframe for the monorail?
The second study has been approved by cabinet and is about to start. There is a tendency that we will go for the same consultant, but we still have to negotiate. The study could take around 18 months to complete and following that we will start the implementation. There is no doubt that one way to solve traffic problems is by having an integrated public transport system and this is firmly on the national strategic plan.
What about the Qatar Bahrain Causeway?
First of all it's not my mandate anymore, but I do follow the details of what is happening and things are progressing, maybe not at the pace people were expecting, but it is moving. I think some mobilisation work is to start soon and they are aiming to start construction in the first quarter of next year, this is feasible provided that decisions are taken at the right time, otherwise things will drag. Moving onto energy, do think renewable energies could play a larger role in Bahrain in the future?
The straightforward answer is yes, we cannot continue to rely on natural gas to power our plants which means we have to move into other areas and this is what we have started doing. We were among the first countries to sign the establishment of the International Renewable Energy Agency. We have also established a committee, which I appointed, which involves several ministries and will investigate renewable options. There is also a higher commission, which was appointed by the cabinet only two weeks ago, looking into nuclear energy options. In parallel to these committees EWA has its own internal committee which is looking in to both nuclear and other renewables. We are not just leaving it to eventualities; we are trying to plan for our future and look into the different available technologies.
At the moment renewable energy sources cannot feed power back into the grid. Is this something EWA is looking to change?
We are. Any renewable that is going to be produced by individual institutions has to feed back into the grid and they should get credit for that because we want to make renewable energies enticing. But we have to assess how this will work and this is going to be part of the work that the committee will be doing.
Are there any time frames for results from the committee?
They had their first meeting last week and the next step will be for me to present their findings to the Economic Development Board executive committee. I think in about nine months they said they will come up with the first of their recommendations.
What about compulsory thermal insulation for buildings, is that on the agenda?
It is mandated in Bahrain that anything over three floors has to be fully insulated but the bigger challenge is moving into the low rise category. I have been discussing how to make it enticing with my colleagues at EWA. If you don't give credit on their build people are not interested in doing an insulated home. If we want to use energy efficiently and preserve our precious resources then we have to have thermal insulated buildings and that's our main objective now.