The right time

Are you too late to secure space the Bahrain Logistics Zone?

Where do I hand in the Bahrain Logistics Zone tender?” an American businessman hurriedly asks the security guard in the lobby of the General Organisation of Sea Ports (GOP) in Bahrain. He is rushing to meet the deadline for applications to lease land at the one sq kilometre plot of land dedicated to re-export and value-added logistics at the new Khalifa bin Salman Port.

And he has reason to be a bit nervous. Over 60 local applicants and several international ones will find out this month if they made the cut. “We are getting a huge response and companies are expressing interest,” says GOP Assistant Director General Hamad Fakhro. “Our land is quite small, so we have to be selective.”

Despite oversubscription, the GOP was kind enough to extend the deadline by a week to ensure that the “the best of the best” 3PLs and freight forwarders handed in their applications. In fact, Fakhro says the zone will accept only around 20 local companies, as it is targeting “all the big players.”

The biggest player of them all, Danzas, the freight forwarding arm of Deutsche Post, is already on board, having signed an Memorandum of Understanding (MoU) to lease serviced warehouse space in BLZ.

Hamad Fakhro, Assistant Director General, General Organisation of Sea Ports, Bahrain

BLZ will offer 20-year leases on plot sizes from 2,000 sq metres as well as warehouses at BD 5.000 to BD 12.000 (US$13.40 to US$32) per sq metre per month.

“The majority of the infrastructure is ready,” says Fakhro. “The land, as well as the services, will be fully ready by the fourth quarter of this year.”

The BLZ will also supply office and commercial space. It takes care of licensing, registration and visa processing, and, of course, offers a customs-bonded zone.

Fakhro says the BLZ may even provide temporary workers if needed. “A company might be handling most of the Formula One logistics which requires equipment or labour for a short period of time,” he explains.

It sits adjacent to a mixed use real estate park, Bahrain Investment Wharf, which will feature labour accommodation, as well as a hotel and Bahrain International Investment Park, a zone dedicated to light manufacturing. “We support each other,” says Fakhro.

The reclaimed land BLZ sits upon is only a 10-minute drive from the Bahrain International Airport, and 45 minutes to Saudi Arabia via King Fahad Causeway. When the new 38.63 kilometres Bahrain-Qatar Causeway is ready, it will also be close to Doha.

And we cannot forget that BLZ sits on Bahrain’s soon to be busiest port. “Now this area looks like a ghost town, but by the end of the fourth quarter, the Mina Salman will be closing and Khalifa Bin Salman will be operating, so you will see a lot of traffic,” says Fakhro.

Much of the BLZ’s business focus will be not on Bahrain, but on the countries surrounding it.

“Right now Bahrain needs a capacity of 240,000 TEUs per year for itself,” says Mauricio Zuazua with A.T. Kearney, the consultancy helping develop the project. “The capacity of the new port is going to be 2.5 million TEUs per year. The strategy of BLZ is placing a lot of emphasis on transhipment, especially for the Northern Gulf countries. Even with the growth that Bahrain is expecting, there is significant capacity for shipments to other countries.”

Sheikh Daij bin Salman Al-Khalifa, Chairman of the General Organisation of Sea Ports, Bahrain for Bahrain Logistics Zone and Enver Moretti, President and CEO EMA Region, DHL Global Forwarding on behalf of Danzas AEI Intercontinental Bahrain sign MoU

This project, he says, is part of Bahrain’s master plan to become a major logistics hub in the region. “Bahrain was a trade centre many years ago, but it lost its lustre. The BLZ is part of a strategic effort to bring Bahrain back to its old glory.”

Bahrain currently ranks 36 on the World Banks Global Logistics Index compared to the UAE’s rank of 20, but still sits higher than other GCC countries. “We are working hard to move Bahrain up the ranking,” says Fakhro.

“There is still a lot of room for improvement,” he admits, explaining that port operator APM Terminals is working closely with Bahrain Customs to improve efficiency. They are moving towards an e-customs system, which will eventually link to BLZ, according to Fakhro. He says customs has processed over BD25 million (US$67 million) in the last few months. “The system is running at 99.6 per cent so far. There is only a .4 per cent error.”

But is Bahrain too late to catch up in its development? “It’s never too late,” says Fakhro. “It’s actually the right time.”