Bahrain: Steps ‘taken to address rising construction costs'

Zawya

05-03-2025

Bahrain - Urgent measures to address the ongoing shortage and rising costs of construction materials, which have been impacting housing and infrastructure projects across the country, have been taken by the government, it was revealed yesterday.
Industry and Commerce Minister Abdulla bin Adel Fakhro said during a parliamentary debate on the unavailability and rising costs of building materials that the government has collaborated with private sector entities, including Asry to temporarily use their ports for importing essential building materials.
'In the past two weeks alone, we have successfully imported more than 100,000 tonnes of construction materials,' Mr Fakhro stated during yesterday's weekly session.
'This has already started to stabilise prices, and we expect further improvements in the coming months.'
Mr Fakhro pointed out that Bahrain remains committed to creating a business-friendly environment that encourages private sector investment in the sector. He highlighted that several companies have already begun investing in new infrastructure to support long-term supply stability.
Mr Fakhro also pointed to a significant development from the recent Bahrain-Saudi Investment Forum in Dhahran, where a joint Saudi-Bahraini committee was formed to explore the feasibility of establishing a binational construction materials company. 'This initiative aims to strengthen economic security and ensure a steady supply of essential materials for future projects,' said Mr Fakhro.
Meanwhile, Housing and Urban Planning Minister Amna Al Romaihi reassured MPs that the government remained committed to shielding citizens from the financial impact.
'Any increase in material costs will not affect the prices of housing services provided to citizens,' she affirmed.
Ms Al Romaihi explained that all housing projects are progressing on schedule and within allocated budgets, thanks to pre-arranged contracts with contractors.
'These contracts include provisions that account for fluctuations in material prices, ensuring that the government, rather than citizens, absorbs any additional costs,' she added.
'Monthly deductions for beneficiaries remain fixed at a quarter of their salary, unchanged despite economic challenges and rising construction costs.'
The minister also outlined that Bahrain's housing finance programmes were reviewed regularly to accommodate market changes. 'The most recent revision in 2022 resulted in the introduction of new financial assistance schemes and increased loan limits to better support Bahraini families,' she said.
She further clarified that public-private partnership agreements with real estate developers lock in sale prices from the outset, preventing any mid-project price increases due to fluctuating construction costs.
'Our goal is to ensure that no citizen is left behind,' said Ms Al Romaihi. 'We are committed to delivering housing projects as planned, without shifting financial burdens onto beneficiaries.'
Despite these reassurances, Parliament's foreign affairs, defence and national security committee vice-chairman MP Hassan Ibrahim, who spearheaded the parliamentary debate alongside nine other colleagues, urged the government to take a more comprehensive, long-term approach.
'The housing dream is slipping away for many Bahrainis,' he claimed. 'While recent imports have provided short-term relief, we need a clear and sustainable strategy to prevent future shortages.'
MPs warned that the upcoming closure of Bahrain's national stone quarry later this year could further strain supply chains, potentially driving prices even higher.
'As Bahrain pushes forward with major housing and infrastructure projects, all eyes are on whether these new government initiatives will be enough to ensure long-term affordability and stability in the construction sector,' he said.
MP Jalal Kadhem Al Mahfoodh advocated for establishing a strong domestic manufacturing base, which would not only enhance self-sufficiency but also save the government substantial costs currently spent on importing these materials.
He suggested the creation of state-owned construction companies under sovereign wealth fund Mumtalakat that could be directly responsible for executing major infrastructure and development projects.
'Self-sufficiency is the only real safeguard against the risk of material shortages,' he added.
The following recommendations were unanimously approved during the session:
n Secure long-term import agreements to stabilise prices.
n Invest in local production of key materials to reduce reliance on foreign suppliers.
n Ensure that Bahrain's expansion plans remain viable despite supply chain disruptions.
As reported earlier in the GDN, construction costs in key GCC markets are likely to rise with a two to five per cent jump expected in the UAE costs and 5pc to 7pc in that of Saudi Arabia this year, according to a report by Currie & Brown, a world-leading provider of cost management, project management and advisory services.
This is mainly due to rising demand that will add pressure to the limited availability of skilled labour and key materials, it stated in its report 'Building a resilient future: Adapting to uncertainty in 2025.'
The industry still faces geopolitical and economic uncertainty, which will continue to disrupt supply chains and increase prices, it stated.
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