Ambitious transport plans to help Bahrain compete as regional aviation centre

Although it is not apparent to passengers landing at the existing terminal, building work on Bahrain’s Airport Modernisation Programme (AMP) is well under way. The project is one of the key individual recipients of finance from the Gulf Development Fund (GDF), through which $10bn is being channelled into Bahrain. The investment will allow the single-runway airport to increase annual passenger numbers to 14m, and so enable the kingdom’s economy to benefit from increased inter-connectivity at both a global and Gulf level.

CONSTRUCTION WORK: A joint venture of the UAE-based Arabtec and Turkey’s TAV won the $1.1bn terminal construction contract in January 2016. Preparatory work on-site began shortly after that and included the demolition of some older buildings on the airport’s periphery and the transfer of Bahrain Aviation Fuelling Company facilities, as well as the establishment of a new fire station, the building of a new main security gate and provision for staff parking. In October 2016 the main contractors moved onto the site and started work on the project, which will be completed in phases by 2020. At the end of the first part of the project in mid-2019, the existing terminal building will be demolished. The government department overseeing the work is the Ministry of Transportation and Telecommunications (MTT). The contractors will build a new passenger terminal, a services building and an aircraft bay. Arabtec and TAV are already working together on building Abu Dhabi’s $3bn Midfield Terminal project in Abu Dhabi.

NEW TERMINAL: The new terminal the contractors are building in Bahrain will be four times the size of the existing building and will occupy an area of 220,000 sq metres. The ground floor arrivals hall will be 5000 sq metres while the departure area in the floor above will be 4600 sq metres. On that level there will be 108 check-in desks, 28 security lanes and a 9000-sq-metre duty-free space. Departing passengers will also have access to premium-class lounges and improved food and beverage facilities. They will board the aircraft from 24 departure gates, while their bags will be transported by a fully automated “smart” baggage handling system. There will be five e-gates and 36 passport control booths to serve passengers arriving at the new Bahrain International Airport (BIA), and the arrivals area will also have a 1000-sq-metre, duty-free store. The new terminal building has also been designed to meet gold LEED environmental specifications.

CONTRACTS AWARDED: A number of additional contracts connected to the AMP were signed at the Bahrain International Airshow in January 2016. The international Dutch company Vanderlande was awarded the contract to design, manufacture and install a system that will be capable of handling 4700 bags an hour. Finnish engineering services firm Kone was awarded a contract for moving pavements and escalators, and US company L3 Communications won the BD11.2m ($29.7m) contract to design, build and install security screening equipment for the new terminal.

The contract to provide 25 passenger-boarding bridges went to CIMC-Tianda, the airport facilities arm of the China International Marine Containers (CIMC) Group. Later in September 2016, another of CIMC’s companies, the CIMC Vehicles Group, announced that it was to establish a factory in Bahrain to manufacture lorry reefer trailers – which are used to transport chilled or frozen foods – to serve the GCC region.

Furthermore, in April 2016 the international architecture and design firm Benoy was awarded the interior design services project contract for BIA as a sub-consultant to Hill International. Benoy is currently working on Singapore’s Changi Airport’s Terminal 4 and its new Jewel Changi Airport, as well as on retail planning for the terminal at the new Beijing Daxing International Airport. The main architecture and engineering consultant for BIA is Aéroports de Paris Ingénierie. Contracts that were still to be awarded as part of the AMP in early 2017 are maintenance, a repair and operation hangar, ICT systems and the air traffic control centre building.

FUNDING: The new airport is being built thanks to financial assistance being provided by the Abu Dhabi Fund for Development (ADFD) under the umbrella of the GDF’s $10bn plan for Bahrain. The ADFD has committed to spending $2.5bn on infrastructure projects in Bahrain covering transport, housing, water, health, energy and roads. Mohammed Saif Al Suwaidi, director general of the ADFD, announced in February 2016 that the fund had contributed $919m to the AMP expansion project, covering 80% of the total cost. The fund hopes the expansion will help the airport act as a catalyst for wider socio-economic development in Bahrain.

GOVERNMENT STRATEGY: The airport is managed and operated by the Bahrain Airport Company, a wholly owned subsidiary of government holding firm Mumtalakat, which also owns national carrier Gulf Air. The government has put the expansion of its international airport at the heart of its plans to expand and diversify the economy. The MTT and the Ministry of Industry, Commerce and Tourism are driving policies to achieve these ends. In April 2016, at a Bahrain Tourism and Exhibitions Authority conference, Zayed Al Zayani, minister of industry, commerce and tourism, announced he would like to see the tourism sector’s contribution to GDP almost double by 2018 from 3.6% currently to 6.6%. Part of the strategy the minister outlined was to improve access to the country. The aviation sector itself contributes 2% to GDP, part of the 7% contribution made by transport and communications as a whole. “Worldwide in the aviation industry there is a positive correlation between GDP growth and growth in airport passenger demand,” Ebtesam Mohammed Al Shamlan, director of air transport at the MTT, told OBG.

AIRPORT SERVICES: One private company which will benefit directly from the airport’s expansion is Bahrain Airport Services. The firm, which was founded in 1977, provides a comprehensive range of services to BIA. This covers ground handling of aircraft, baggage and passengers, including operation of the premier-class Dilmun Lounge. Its cargo section handles 280,000 tonnes of freight a year, while its catering wing produces and provides 500,000 in-flight meals a month. The company also services aircraft for 17 airlines and runs its own aircraft engineering training centre. The company is optimistic that Bahrain will be able to attract more passengers by expanding capacity at an airport that was originally built for only 3m passengers, but currently handles more than 8m a year. “I believe some airlines have delayed coming to Bahrain because of the congestion, and so I expect natural growth and I think that in this case the saying that supply creates its own demand is definitely true,” Abduallah Abokhamseen, former CEO of Bahrain Airport Services, told OBG.

REGIONAL COMPETITION: However, the developments at BIA are only one part of a wider story across the GCC. In its August 2016 report on the hospitality sector in the Gulf, Alpen Capital reported that in Saudi Arabia alone 27 different airports are expanding or modernising. In three phases the capacity of King Abdulaziz International Airport in Jeddah will grow from 13m passengers per annum to 30m in 2016, and subsequently to 43m and 80m in 2025 and 2035, respectively. However, even at those levels Jeddah’s expansion will be overshadowed by Dubai’s growth plans for its two international airports. Dubai International Airport’s capacity will grow to 90m passengers per year by 2018 and 118m by 2023, while Al Maktoum International Airport at Dubai World Central will be expanded to reach a capacity of 120m passengers annually. In Abu Dhabi, Midfield Terminal will be capable of dealing with 30m passengers every year by mid-2017.

In Qatar, Hamad International Airport’s capacity of 30m passengers per annum is scheduled to double by 2020, and Oman’s new Muscat International Airport will have an initial capacity of 12m passengers, but with a blueprint to grow to 48m passengers annually. Kuwait International Airport is scheduled to grow from 7m to 13m passengers per year in 2017 and to 25m passengers by 2025. On the one hand, such aggressive growth can be perceived as a threat to Bahrain, which could find itself sidelined by these global aviation mega hubs that market themselves as destinations in their own right. On the other hand, it can also be seen as an opportunity to benefit from an increasingly interconnected region. “The rapid growth of other airports presents a challenge to us, but we have to remember that the nature of their operations is very different to us, with Dubai attracting passengers prepared to shop for luxuries, while our market may be smaller and more price sensitive,” Al Shamlan told OBG.

BEYOND 2020: The MTT is confident that it will achieve annual growth in passenger traffic of 4% in the run-up to the opening of the new terminal, and that additional capacity may draw new airlines and routes and so accelerate growth thereafter. If that proves to be the case, Bahrain has a contingency in mind. Aéroports de Paris Ingénierie has already drawn up a detailed blueprint for a new international airport, with two 4000-metre runways built on a 1497-ha, man-made island and served by a terminal with a capacity for 30m passengers per year.