BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Freight Transport Sector Of Bahrain

Two developments should boost Bahraini sea cargo movements. First, the Bahrain-US free trade agreement (FTA) came into effect on August 1. The agreement immediately offered Bahrain’s private sector 96% duty-free access to the US market. The textile, telecom, banking and finance, insurance, services and industrial sectors will be the immediate beneficiaries of this landmark trade agreement. Private sector leaders believe that a comprehensive strategy will enhance existing trade volumes by at least by 20% as well as encouraging an increased flow of inward foreign direct investment (FDI) in all vital segments of the national economy. Second, APM Terminals Bahrain, the joint venture of the Netherlands-based container terminal operator APM Terminals and the Bahraini diversified group of companies Yusuf Bin Ahmed Kanoo Holdings, was awarded a concession to run the port and marine services in Mina Salman and later Khalifa bin Salman Port in Hidd. The joint venture will invest some US$61.9mn in new equipment, including new container cranes and other handling equipment, for the ports over the next two years. In our new Bahrain Freight Transport Report, BMI concludes that maritime cargo tonnage is set to grow at around 5.5% per annum over the next five years.

Various factors support this prediction. The economy, expanding at around 5.2% per annum, will support freight demand as will foreign trade (albeit at a slower pace). With an advanced transport infrastructure and competitive ports, Bahrain will be well placed to maximise sea freight opportunities. The FTA with the US should also play its part.

The outlook for the rest of the freight sector is good. By transport mode, we expect the fastest growing to be air cargo, which will expand by an annual average of 8.8%, supported by the recovery of Gulf Air. It will be followed by sea freight, supported by the new FTA with the US and an upgrade of facilities at the two ports now managed by APM Terminals Bahrain. We expect pipeline throughput to broadly follow GDP at 5.2% per annum. We estimate that road haulage will lag behind GDP a little, at 4.5% per annum. A boost is likely outside our forecast period (i.e. after 2010) when the proposed causeway to Qatar is expected to come into operation. Bahrain scores above the regional average in our freight industry business environment ranking, doing particularly well on long-term economic risk, and on the competitive and regulatory environments. It is below the regional average on freight transport growth and transport intensity (a measure of foreign trade dynamism).

According to our latest estimates, the total value of transport and communications GDP will rise to US$1.13bn in nominal terms by 2010, representing 7.4% of Bahrain’s GDP. There are no official figures on the number of people employed by the transport sector.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Mina Sulman Port SWOT

Bahrain Economic SWOT

Bahrain Political SWOT

Chapter 3 - Business Environment Overview

Regional Overview

Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Labour Force

Chapter 4 - Industry Trends and Developments

Road

Air

Sea

Chapter 5 - Pipelines

Chapter 6 - Industry Forecast Scenario

Macroeconomic Outlook

Table: Economic Activity

Transport Outlook

Table: Freight Turnover (domestic and international):

Table: Freight Industry Indicators

Chapter 7 - Trade Environment

Foreign Trade Regime

Table: Value Of Imports By Category (US$mn)

Table: Value Of Exports By Category (US$mn)

Table: Top Export Destinations, US$mn

Table: Export Trade, % y-o-y

Table: Top Import Sources

Table: Import Trade, % y-o-y

Chapter 8 - Market Overview

Multimodal

Infrastructure

Road

Infrastructure

Air

Infrastructure

Chapter 9 - Company Monitor

Water

Infrastructure

Company Profiles

Pipelines

Infrastructure

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Transport Industry

Sources

Chapter 11 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 12 - Country Snapshot: Bahrain Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Competitive Landscape for Middle East & Africa Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Middle Eastern & African Freight Transport Sources

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BMI's Middle Eastern & African Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: