The recent decision by Bahrain’s environmental department to give the $1.2bn Hidd steel mill permission to go ahead will have been a relief for the senior management at the Bahrain-based United Steel Company (Sulb), a joint venture comprising of Kuwait’s United Steel Holding Company (Foulath) and Japan’s Yamato Kogyo Company.
The facility had been refused a building permit by the local Muharraq Municipal Council on environmental concerns and, despite the permission to build from the Bahrain government, Sulb still has to reapply for a building permit to the local council.
However, it would take a brave local council to refuse the Hidd Steel Mill again after it has gained the official environmental seal of approval from Bahrain’s central government.
Since the beginning, Sulb has always maintained the facility would meet international standards on emissions. MEED reported in early June that industry insiders were confident the project would break ground as scheduled in July, and that the problem Sulb was facing was the usual bureaucratic obstacles familiar to anyone doing business in the region.
While adhering to environmental procedures during the construction of large industrial projects is vitally important, heavy bureaucracy remains an obstacle in many of the region’s markets and needs to be minimised.
It is likely that by mid-June it will be business as usual at the Hidd Steel Mill, but the danger is that other companies may now be discouraged from choosing Bahrain as a base.
While local authorities provide a vital connection between business and the local population, the question of a country as small as Bahrain needing so many different decision-making layers for a such a complex project.