Infrastructure upgrades to improve air, land and sea travel in Bahrain


Bahrain is home to a dynamic transport sector, including one of the Gulf’s oldest airlines and a causeway linking the kingdom to Saudi Arabia, the region’s largest economy. A second such link is in development, and soon the kingdom will also be connected by rail to the (GCC) train network.

In addition, it will gain an expansive urban light rail system, a new airport as well as a revitalised national aircraft fleet. Bolstered by such projects, the sector is expanding. The transport and communications industry grew by 5.4% in 2017 in real terms, according to figures from the Bahrain Economic Development Board (EDB). This was faster than overall GDP growth of 3.8%, and an increase from 2.5% the previous year.

Structure & Oversight

The transport industry is overseen by the Ministry of Transportation and Telecommunications (MTT). The ministry operates three transport-related divisions that regulate, as well as seek to promote and develop, the various segments of the growing industry.

These divisions include Civil Aviation Affairs; Land Transport Affairs, which focuses in particular on public transport (bus and rail) and taxis (supervised by the Land Transportation Regulation Directorate); and Ports and Maritime Affairs. Road building and necessary related maintenance matters are carried out by the Road Projects and Maintenance Directorate at the Ministry of Works.

Infrastructure Development

A wide range of upgrades to Bahraini transport infrastructure are currently either under way or in development. These upgrades are part of $32bn of planned investments to upgrade the kingdom’s overall infrastructure. Of this figure, $8.8bn is expected to be spent on transport and logistics-related projects.

These include the construction of a new airport terminal to replace the kingdom’s current facility, due to open in the third quarter of 2019 (see analysis), and plans to build both a light rail metro network and a second causeway linking the kingdom to Saudi Arabia. A bi-modal railway network will be integrated in the new King Hamad Causeway to serve passengers and freight. In addition, Bahrain Airport Company is planning to develop a new cargo and logistics area.

A key element of the authorities’ transport strategy is to develop public transport options in order to reduce reliance on private motor vehicles. These remain by far the dominant mode of transport in the kingdom, a fact that has given rise to significant congestion problems and is regarded by the government to be unsustainable. The efforts to reduce private transport use include the 2015 launch of a privately operated bus network, as well as the development of plans for a 109-km light rail metro network. There are also long-term plans in place for the establishment of a new rapid transit bus network.

Foreign Direct Investment

The transport and logistics sector attracted $78m of foreign investment in 2017, accounting for 10.6% of total inward investment flows for the year, according to figures from the EDB. Specific figures for investment in the sector are not available, but overall investment in the manufacturing and logistics sector rose strongly from 2016 to 2017. Investment in the sector was boosted by a January 2016 move which allowed for 100% foreign ownership of regional distribution centres throughout the kingdom, alongside other liberalisation efforts to make Bahrain more conducive to inward investment in the sector.

Several prominent international logistics companies have a presence in Bahrain, including Agility Logistics, which operates a sizeable 28,500 sq metres of warehousing space, and in 2017 further invested in expanding its operations in the kingdom to cater for the growing demand for contract logistics and export oriented producers.

Public-Private Partneships

Public-private partnerships (PPPs) have recently taken off in the GCC region in a large number of sectors, perhaps most successfully in the area of power generation, with a growing number of independent power and water projects being established in various GCC states, including in Bahrain. Several major transport infrastructure projects in the planning phase are set to be built and operated under established PPP frameworks in the kingdom.

In mid-2017 media reported that the planned second causeway linking Bahrain and Saudi Arabia, as well as the planned Saudi-Bahraini rail link connecting the kingdom to the GCC rail network via the new causeway, will also be built under PPP frameworks. A private joint venture already operates the kingdom’s bus network under a 10-year concession.

Public Transport Provision

The principal form of public transport that is available in Bahrain is the kingdom’s extensive public bus network. In 2015 the government launched an upgraded version of the network, with 141 new buses replacing the previous fleet of 35. The number of bus routes was also increased significantly, from 12 to 29.

The network is run under a 10-year concession agreement with the MTT, in a joint venture between local construction firm Ahmed Mansoor Al Aali and the UK’s public transport operator National Express. Known as Bahrain Public Transport Company, it presently covers 77% of urban areas in Bahrain, with plans to eventually raise this coverage to 100%. It moves between 32,000 and 35,000 passengers daily on weekdays – a number that rises to 46,000 on weekends. A smartphone app offering network and timetable information, as well as journey planning services, was launched in June 2017.

The authorities have plans to dramatically upgrade public transport infrastructure in the kingdom under their Public Transport Master Plan 2030. This involves the construction of a 109-km, six-line light rail metro network, expected to be completed in four phases by 2050. The first phase of the network will be 29 km in length, consisting of two lines with a total of 20 stations. These will include two interchange stations as well as a stop at the highly anticipated GCC International Railway station at Ramli, which is on the future railway line that will connect to the GCC rail network. A feasibility study for the project was completed by consultants in December 2018, with a transaction advisory tender due to be issued in the first quarter of 2019, and a request for proposal expected to be issued about a year after that. The MTT currently anticipates that construction will begin in 2021 or 2022. Once the network is in operation, the kingdom’s bus network will be reorganised in order to complement the metro network and feed its numerous stations. The MTT also has long-term plans to launch a bus rapid transit system, though currently its focus is on delivering the metro project.

Import-Export Infrastructure

Plans are in place to develop a second causeway linking Bahrain to Saudi Arabia and running parallel to the King Fahd causeway. About 13.9m people crossed the existing structure in 2017, and June of that year saw record traffic, with 117,935 people crossing on June 04, which marked Eid Al Fitr. Traffic is expected to reach an average of around 60,000 journeys a day by 2030, underscoring the need for a second link. Feasibility studies on the project have been completed, and the authorities are amidst a tender to appoint a transaction advisory consortium to prepare the Project for an execution through a some form of PPP. The project, known as King Hamad Causeway, will also add four additional road lanes as well as a double track railway which will serve both passengers and freight.

Dana Abdullah, manager of business development for manufacturing, transport and logistics at the EDB, said in a statement that the new causeway is expected to be highly advantageous for the kingdom’s logistics and manufacturing industry. “Congestion can be an issue on the existing causeway but this will not continue to be a problem once the new project is in place. Bahrain has already managed to reduce the congestion on the current causeway to less than 24 hours,” she told OBG.

In the meantime, efforts are also being made to improve traffic flows and logistics capacity on the existing causeway. These include the creation of separate dedicated lanes on the King Fahd causeway to Saudi Arabia – Bahrain’s biggest export market – for trucks carrying perishable goods, as well as empty trucks and transit vehicles.

In addition, a new fast-track lane has been established for the biggest producers and exporters based on overall volume of shipments in Bahrain and Saudi Arabia, with the top-10 exporters currently equating to approximately 60% of overall trade volume, thus lessening the burden on the other lanes and translating to vastly improved lead times. The Bahraini authorities also have plans to double the number of passport control gates on their side of the border, measures which aim to reduce the waiting times for trucks from the current high of six days down to a possible one hour period. One law has been passed that obliges trucks to have an international licence – which is only available to those that have their own yards and meet various stringent health and safety requirements – to use the causeway. The government has postponed implementing the regulation twice in order to give trucks time to adapt to its requirements, but it had been due to come into effect at the beginning of August 2018. In August 2018 Saudi Arabia also announced plans to increase both the number of lanes approaching the structure as well as the number of identity-checking booths, with the intention of increasing overall capacity.


Bahrain International Airport (BIA) is located in Muharraq, an island in the north-east of the country. It is connected to the capital Manama via three causeways, and will soon be connected by a fourth. The current facility is forecast to be replaced in 2019 when a new terminal is completed, which will boost capacity from 9m passenger movements per year up to 14m (see analysis). According to Salman Al Mahmeed, CEO of Bahrain Airport Services, the major transportation infrastructure upgrades will strengthen the country’s economy. “In particular, it will improve the logistics and transportation services that we can offer the region,” he said.

The airport benefits from 96 air service agreements with other countries, signed by the MTT’s Civil Aviation Affairs (CAA) department. Around half currently follow full open sky policies; another 30% are moderately regulated, covering strongly competitive routes flown by national flag carrier Gulf Air, mainly in the GCC and south Asia; and the rest are subject to more severe restrictions. In all cases these regulations are at the behest of the other countries involved, rather than originating from Bahrain. The most recent of these agreements was signed with Sri Lanka in December 2017. The CAA has also recently updated its agreements with several countries including Morocco, Kenya and Japan.

According to the CAA, total passenger movements at BIA were down 3% from 2016, reaching 8.4m in 2017. Combined arrivals and departures stood at 5.15m, equivalent to 60.7% of total movements, while transfers stood at 3.36m and accounted for 38.8% of the total. Traffic movements turned around in the year to July 2018, rising by 0.4% year-on-year. Movements were down in the early months of 2018, but rose sharply in June and July by 26% and 16%, respectively. The top route in 2017 for passenger movements was between Dubai and Bahrain, at 1.46m, which was up 7% from 2016, followed by Bahrain and Kuwait (639,000 passenger movements, up 19%) and Bahrain-Riyadh (down 9% to 442,000).

By region, the GCC accounted for 58.4% of total passenger movements, followed by the Indian subcontinent at 18% and Europe at 9.2%. Gulf Air contributed to 62% of passenger movements, with Emirates capturing the second-largest market share at 11%, and Fly Dubai coming in third with around 5%.

Gulf Air is fully owned by the Bahrain government. Although it has always been headquartered in Bahrain, the airline was established in the mid-20th century as a private foreign-owned company before being taken over by the governments of Bahrain, Abu Dhabi, Oman and Qatar in the 1970s, in order to act as a joint regional carrier. Over time, however, all foreign governments withdrew from the airline, and when Oman ceded its stake in 2007 it finally became fully Bahraini-owned.

The airline currently flies 47 routes across three continents and is working to expand its network. It launched flights to Alexandria, Sharm El Sheikh, Baku, Bangalore, Calicut and Casablanca in mid-2018, and that year served just over 5m passengers.

This is a figure that Captain Waleed Al Alawi, deputy CEO of Gulf Air, said he hoped would pass the 6m mark in 2019. According to Al Alawi, the airline is seeking to compete both in price and service by ensuring comfort and punctuality. As part of this, he says that the carrier’s Falcon Gold class could compete with non-apartment First Class services on other carriers, while also offering business class fares. “For example, we source our Falcon Gold seats from the same suppliers used as first class seats for other airlines,” he told OBG.


The flag carrier’s route expansion programme and ambitions to increase passenger numbers are being supported by a dramatic expansion and upgrade of its aircraft fleet. In early 2016 the airline announced plans to acquire 29 Airbus Neo-series A320 and A321 aircraft. It also ordered 10 Boeing 787-9 Dreamliner aircraft, with the option to purchase six more in the future.

Gulf Air received its first Dreamliner in April 2018, and by the end of the year it had received an additional four. Two more are expected to arrive by the end of 2019, and the final three will be received by the termination of 2020. The first two aircraft were deployed on the airlines’ twice daily route to London, and the third is used for its new Casablanca route.

Al Alawi told OBG that the next two will likely be deployed on its current far eastern routes to Manila and Bangkok. While the new aircraft will partially replace some of its existing fleet, the airline plans to keep some of its A320s and A321s, at least in the short term. “We have started to change how people perceive the company, with the introduction of the new fleet and increased advertising. Our strategy is to be the airline of choice, and we need a young fleet for that,” Al Alawi told OBG.

In order to drive traffic, Gulf Air is also expanding its code-sharing activities, signing agreements with Oman Air and Turkish Airlines in August 2017 and September 2017, respectively. The new deals bring the total number of such agreements in place to eight, and there are plans to add more. “In the world of aviation, the more codeshare agreements the better,” Al Alawi said, adding that several more agreements were already in the pipeline. The carrier is working to expand the scope of agreements beyond hub-to-hub flights, thereby increasing the total number of destinations covered.

Looking to the longer term, the airline is considering increasing its presence in the Far East and on other long-haul routes. “We are evaluating the Chinese market and may look at Singapore too,” Al Alawi told OBG. “We are also thinking about routes to the US and would like to further increase our presence in Europe as well.”


The kingdom’s commercial port is Khalifa Bin Salman Port (KBSP), located on reclaimed land in the Al Hidd area in north-eastern Bahrain. It opened in 2009, built at an investment cost of BD183.6m ($486.5m), including BD80m ($211.9m) of reclamation works. It took over from the Salman port as the kingdom’s main commercial port, though the Salman port continues to service the Fifth Fleet of the US Navy. KBSP is located 40 km from Saudi Arabia via the King Fahd causeway, allowing it to serve as a gateway into the GCC’s largest market. The rail link, which connects Bahrain to the GCC rail network, will also serve the port upon completion, which is expected to take place around 2023. KBSP is operated by APM Terminals Bahrain, a joint venture established between Dutch-headquartered international ports operator APM Terminals (the port operating arm of Maersk Group) and Bahraini conglomerate YBA Kanoo Holdings, under a 25-year concession that runs to 2034. Maersk holds 64% of shares in APM Terminals Bahrain, while 16% is owned by YBA Kanoo Holdings and 20% of shares are publicly held under the concession.

The facility includes a 900,000-sq-metre general cargo and container terminal, with handling capacity of 1.1m twenty-foot equivalent units (TEUs); some 63,500 sq metres of storage space across four warehouses; and a 3480-sq-metre passenger cruise terminal. It offers a minimum allowable vessel draft of 13 metres (increasing up to 14 metres at high tide), six deepwater berths and around 1200 metres of container berths. There are also 600 metres of general cargo quay length. The port handled 402,645 TEUs of container cargo in 2017, up from 379,817 TEUs the year before, according to figures from APM Terminals Bahrain. General cargo volumes also increased in 2017 to 943,691 freight tonnes per year, compared to 778,874 tonnes in previous years.

The largest category of general cargo in 2017 was steel, at 474,666 freight tonnes per year, up from 314,521. Volumes look likely to grow further in 2018: container traffic stood at 220,979 TEUs for the first half of the year, up from 197,685 TEUs the year prior. General cargo traffic for the period stood at 406,083 tonnes, expanding from 371,395 tonnes in the first half of 2017.

Adjacent to the port is the Bahrain Logistics Zone, a 1-sq-km bonded logistics area that opened in 2008. As of late July 2018 the zone was 73% occupied, with this expected to rise to 85% by 2019. In order to create more space, plans have been established to build a 1.5-sq-km second phase of the project. It is expected that this will be built on reclaimed land from the sea. Salman Shakeeb, chief of operations at Ports and Maritime Affairs, told OBG that the zone authorities were currently working on funding for the project, and a schedule for construction of the new phase is anticipated to be finalised soon.


Bahrain is not currently home to a railway network. However, the planned second causeway linking Bahrain to Saudi Arabia will include space for a railway connecting the kingdom to the Saudi portion of the proposed GCC railway.

The development of a regional network has been repeatedly delayed amid budget cuts following the post-2014 oil price decline. However, a representative of the General Secretariat of the GCC told media in March 2018 that member states hope to have the first phase of the project, linking the railway networks of Oman, Qatar, Saudi Arabia and the UAE, completed by the end of 2021. Links to Bahrain and Kuwait are expected to be in place about two years after phase one reaches the point of completion.

The Bahraini section will consist of a 70-km line connecting the Saudi part of the network to a freight terminal at KBSP via the new causeway, and a passenger station at Ramli, south-west of Manama, which will link up with a planned light rail metro network. According to a report released by Reuters in mid-2017, covering a pertinent project document, the authorities forecast that the link – which is anticipated be built under a PPP framework – will be set to carry 8m passengers, 600,000 containers and 13m tonnes of bulk freight by 2050.


A major upcoming road construction project is the construction of a second 25-km causeway linking Bahrain to Saudi Arabia and running parallel to the existing King Fahd Causeway. Within Bahrain, the Ministry of Works’ Road Projects and Maintenance Directorate undertook 554 roads projects in 2017, comprising construction, paving and maintenance projects. It spent BD2.7m ($7.2m) on paving dirt roads and BD6.7m ($17.8m) on road improvement projects. Major roadworks under way include BD51m ($135.1m) of work to revamp the Alba and Nuwaidrat interchanges in the south. The project began in August 2015 and is anticipated to reach completion by the end of 2019.

In 2017 the authorities also began work on a project to build a fourth bridge between the capital Manama and the island of Muharraq, where the airport and much of the nation’s industrial base are located. The 3.6-km bridge will connect the Busaiteen area of Muharraq to Bahrain Bay. Other major road projects currently being undertaken include the expansion of the capital’s Istiklal Street from four to five lanes and the redesign of the Al Mahzoura-Estiqlal highway intersection.

The authorities also have a four-stage plan to upgrade roads from the capital to BIA, starting with the conversion of Road 2403 to a one-way road leading away from the airport in the first quarter of 2019. A plan is also under consideration to build an underpass directly connecting the Sheikh Isa Bin Salman Causeway – one of the three existing causeways that link Muharraq to Manama – to the airport, with the goal of reducing congestion in Muharraq. The government has previously rejected plans to build a flyover for the same purpose.

State Revenue & Expenditure

The government’s 2018 budget plans for recurrent expenditures of BD32.98m ($87.4m) at the MTT, a slight increase from BD32.51m ($86.1m) the previous year, and for project expenditures of BD4.5m ($11.9m), slightly up from BD4m ($10.6m) in 2017. The budget anticipates the ministry will generate revenues of BD45m ($119.2m), unchanged from the previous year. Recurrent expenditures for the economic affairs and infrastructure sector at the Ministry of Works, which is responsible for road building, are set at BD43.5m ($115.3m), up from BD43m ($114m) a year earlier, and project spending of BD64m ($169.6m), up BD4m ($10.6m) from the previous year. Revenues at the ministry are expected to stand at BD11.03m ($29.2m), up from BD3.57m ($9.5m) in 2017.


A wide range of infrastructure projects under way or in the pipeline are set to dramatically increase capacity in Bahrain’s transport and logistics industry, with positive implications for the development of the wider economy. For example, the development of the new causeway and the railway link to Saudi Arabia will boost the attractiveness of export-oriented manufacturing in Bahrain, while the new airport terminal and Gulf Air’s upgraded and expanded fleet should positively affect local tourism. Plans to use PPP frameworks for some of these projects will also offer large-scale opportunities for private investors to enter the sector, bolstering overall foreign investment and reducing capital expenditure costs expected for the government.


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The Report: Bahrain 2019

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