$1.1 billion Airport Modernisation: Opportunity for Indian Cos - Kamal bin Ahmed Mohammed, Minister of Transportation and Telecommunications, Kingdom of Bahrain
His Excellency Kamal bin Ahmed Mohammed is Minister of Transportation and Telecommunications in the Kingdom of Bahrain, with overall responsibility for transport infrastructure, policy, regulation and the development and delivery of projects. He is also the Chief Executive to the Economic Development Board, the public agency for attracting inward investment into Bahrain. He serves as board member of Bahrain Mumtalakat Holding Company, Bahrain Economic Development Board, Quality Assurance Authority for Education and Training (QAAET), and Higher Education Council (HEC). He holds a Bachelors in Civil Engineering from the University of Bahrain and a Masters in International Project Management from Leeds University.
In an interview with Aeromag he spoke about India-Bahrain business relations, Indian investments in Bahrain, the roadmap for Bahrain’s aerospace industry, the Airport Modernisation Programme, the bus network, plans for the GCC rail, land and sea logistics, the restructuring of Gulf Air, and many related things. He also discussed the plans for aviation and tourism sectors, the Bahrain International Air Show (BIAS) and Aero India 2017. He extolled India’s initiatives such as Make in India and Start Up India as key to encouraging two way investments. Excerpts:
Your Excellency Engineer Kamal bin Ahmed Mohammed, as the Honourable Minister for Transportation and Telecommunications, Kingdom of Bahrain, a close ally of India, how do you perceive the growth of Aero India and Bahrain’s association with it?
Aero India has grown to become a leading civil and military trade event for the region with over 600 exhibiting companies and a strong delegations programme. It is an important showcase for the Indian aerospace industry, particularly in light of your Make In India programme. It is attracting more and more international participation too.
Like in the Middle East, the aerospace industry is growing at a rapid rate as demand for air travel is growing rapidly. Events like Aero India and the Bahrain International Airshow allow the aviation industry to come together, do business and discuss the issues affecting the industry in the region.
Bahrain, which hosted the first airport and the first airline in the Gulf, has a proud history in the aviation industry, and the Bahrain International Airshow (BIAS), under the Royal Patronage of His Majesty King Hamad bin Isa Al Khalifa, has evolved into one of the most elite business-to-business events on the global airshow calendar. What would be the outstanding features of the 2018 November event?
While we are still some time away from BIAS 2018, we have started working on the preparations as soon as the 2016 show ended. We have already confirmed participation from a number of international companies with virtually all the chalets either booked or held in reserve.
The 2018 show will see the exhibition hall double in size taking up the entire hanger space at the Sakhir Airbase. We have already reserved space in the hall and based on feedback to date, we are expecting significant growth in international participation.
With networking once again top of the agenda, we will be hosting a conference programme and hosted-buyer programme. New for 2018, we will also introduce an on-floor presentation theatre allowing our exhibitors to run production demonstrations, seminars and workshops. The Manama Air Power Symposium organised by the Royal Bahraini Air Force will take place on 13th November 2018. There we welcome Chiefs of Air Staff from around the world to Bahrain and BIAS.
One of the most significant developments regarding the 2018 show will be the change in the dates. As the fastest growing airshow in the region we have taken the decision to change the dates to 14th–16th November 2018. By creating more time between the Bahrain International Airshow and the Dubai Airshow we hope to create an annual showcase for the Middle East aerospace industry, optimising the potential of BIAS in response to the growing industry demand.
India’s indigenous Light Combat Aircraft Tejas built by the Hindustan Aeronautics Limited made its international debut at last year’s Bahrain International Airshow held at the Sakhir Air Base, even before it was inducted to Indian Air Force squadron. How was the reception for the LCA in Bahrain?
As one of the smallest and lightest aircrafts in its class, the Tejas’ manoeuvrability was quite impressive and was received with significantly positive response. We were delighted that BIAS16 was chosen for its international debut. Our extensive delegations programme with senior government and military officials in attendance meant the aircraft was seen by the who’s who of the industry and generated some interest from a number of countries. As well as reflecting the growing strength of the show, it also symbolised the strong relations between Bahrain and India.
As a manifestation of great co-operation between the two nations, Indian Air Force Helicopter Display Team Sarang too was invited by the Royal Bahraini Air Force for the Airshow in Bahrain in January 2016. Such goodwill gestures have a great affirmative impact on bilateral relations. How do you propose to strengthen these ties further?
The economic and cultural ties between our two peoples stretch back thousands of years. India has always been an important partner for Bahrain and we only expect that to grow in the coming decades. Furthermore, Bahrain is home to more than 350,000 Indians—a significant proportion of a total population of just over a million people.
Our continued participation in Aero India is simply an extension of this deep rooted relationship, and during the team’s visit to the show they will be holding meetings with key Indian aviation businesses who are looking for opportunities in Bahrain and the larger GCC market.
Equally, we hope to increase Indian participation at BIAS through the expansion of the Indian Pavilion and inviting larger delegations. The aviation industry in India is now big business as commercial passenger travel becomes as popular as train travel. At the recent India Aviation Summit it was announced that major investments would be made in airport infrastructure. As more airports in India come alive, I am sure there will be more opportunities for Bahrain-India cooperation.
Additionally, the development of our own airport infrastructure under the Airport Modernisation Programme will see the new passenger terminal at Bahrain International Airport building its capacity to 14 million passengers annually. I am sure we will be looking at areas in which Indian businesses can participate in this $1.1 billion project.
The Kingdom’s investment incentives, its strategic location as a gateway to the GCC States and the US $1.5 trillion GCC market are major highlights for the Bahrain Airshow, with a record of over 30,000 trade visitors, 135 participating companies and total deals worth $ 9 million. India’s DRDO is among the major official delegations at the event. Do you expect more Indian participation for the next edition?
Yes, we hope so. Our delegations team will be working with the Indian Embassy in Bahrain to compile a list of key figures on both the civil and commercial side to invite as part of a delegation.
It is also one of the key reasons why my team is attending Aero India. We have a full diary of engagements and will be meeting with existing and potential participants at the show such as DRDO, ADA, HAL and MOD. India was a major exhibitor at BIAS16 and we hope to be able to double the size of the Indian Pavilion for 2018 and become a showcase for the Indian aerospace industry in the MENA region.
The Bahrain International Airshow is a great opportunity for Indian businesses to explore the Middle East market, particularly now that the show will take place in alternate years with a gap of one year to the Dubai Airshow.
Showcased as Asia’s Premier Airshow, Aero India offers wider networking opportunities for international players in aerospace, defence, civil aviation, airport infrastructure and defence engineering. What would be Bahrain’s focus of attention here?
At the show we hope to be able to touch base with our existing business partners that have previously exhibited at BIAS and strengthen our relationships with the DRDO.We will also be networking with other leading Indian and multi-national organisations with a view to securing their participation at the show in 2018.
When His Majesty King Hamad bin Isa Al Khalifa visited India last time, a number of MoUs were signed between the two nations, including $450 million bilateral trade and investment. How satisfied are you with the growing opportunities for investment and co-operation with India under the new initiatives like Make in India?
We are delighted with the progress that has been made in recent years and are very excited about the potential for further growth in trade and investment in the coming years.
In recent years, significant efforts have been made to enhance our mutual relationship. The visit by a Bahrain business delegation led by His Majesty the King to India in 2014 was a testament to the strong ties. During the Bahrain-India Business Forum in 2014, Bahraini companies announced a total of seven deals with their Indian counterparts and a total of 27 deals between key business organisations from both India and Bahrain, including the signing of 12 memoranda of understanding, comprising of $450 million worth of bilateral trade and investment.
Since then, co-operation and investment between the two countries have continued to grow. There are also currently a number of leading Indian companies with established offices or facilities in Bahrain. These include Electrosteel, Chemco, Ion Exchange, JBF Industries, Tata Consultancy Services, ICICI Bank and State Bank of India. These links are supported by excellent connectivity by Gulf Air’s daily flights between Bahrain and a number of Indian cities.
Indian businesses are constantly looking at further opportunity to invest in Bahrain, and in February 2016, Electrosteel Castings launched its new $6.6m warehouse as a ‘regional hub for sales and distribution activities to the Northern and Middle Eastern markets’. In April 2016, Ion Exchange, a leading Indian environment solutions provider, established a new chemical blending facility to serve as an export hub for GCC region, further demonstrating the commitment of Indian firms to invest in Bahrain.
Revolutionary initiatives such as Make in India and Start Up India are key to encouraging two way investment, and we expect to see further co-operation between Bahrain and India in the coming years.
Being the minister responsible for public transport, civil aviation, ports, and the Bahrain Post, you have leveraged the projects for integrated connectivity with a new port, modernisation of the airport infrastructure and a rail network. What are the new updates?
The Ministry of Transportation and Telecommunications is currently embarked on the Airport Modernisation Programme (AMP), which aims to increase the Airport’s capacity to 14 million passengers per year. The AMP, a project exceeding $1 billion, will be the first major infrastructure development project for the airport in over 30 years.We have appointed all the key contractors for this project and the enabling works are well underway in line with the project schedule to complete the first phase in 2019.
In 2015 we successfully launched a brand new public transportation system, completely revamping Bahrain’s bus network introducing the most advanced buses available. We are now embarking on our rail plans, with the recent appointment of IDOM Consulting to conduct a full feasibility study and lay out an action plan for introducing rail into Bahrain.
On a larger scale, we are also working with our neighbours to set the plan for the GCC rail, which will enhance connectivity within the region, offering huge opportunities for businesses operating here.
Simultaneously, we are further developing our land and sea logistics.Bahrain’s main port, Khalifa Bin Salman Port, was opened in 2009 and is operated by APM Terminals Bahrain, a subsidiary of AP Moller-Maersk, and is today one of the leading regional ports in terms of efficiency.This is complemented by the Bahrain Logistics Zone (BLZ), located adjacent to the port, offering logistics companies a convenient location close to the port and only 15 minutes away from the Airport, and 30 minutes from the King Fahd Causeway which links us to the Kingdom of Saudi Arabia.We are looking into developing Phase 2 of the BLZ as we have witnessed growth in demand with almost 80% of the existing BLZ land now occupied.
All of these initiatives together form an integrated transport and logistics network which will be further enhanced once the new passenger terminal building at the Bahrain International Airport is open.
You had envisaged plans for restructuring the national carrier, Gulf Air. Have you made a significant breakthrough in the highly competitive region?
Gulf Air is undeniably back on track since its restructuring. In 2015, our financial losses fell by 88% in the three years since we embarked upon our restructuring strategy, with annual losses dropping by almost BHD40 million over 12 months. From BHD62.7 million in 2014 to BHD24.1 million in 2015 is a landmark 62% reduction.
I am proud of the achievements we have made including a record reduction in annual losses, an improved performance and an increasingly positive financial trajectory for our national carrier. We are further stabilizing and strengthening the business in both short and long term. As we successfully eradicate legacy debts, Gulf Air is further enabled to manage its controlled future growth, with the capabilities to further invest in the airline’s ongoing growth and development.
In 2016 at the Bahrain International Airshow, we announced Gulf Air’s restructured aircraft orders, comprising 45 aircraft with Boeing and Airbus in deals worth a combined total of USD7.6 billion. This ensures that we maintain one of the youngest fleets in the region while building upon our award-winning reliability and on-time performance. The orders consist of 16 Boeing 787-9 Dreamliners, 17 Airbus A321neo and 12 Airbus A320neo aircrafts. Deliveries of these aircrafts will commence from Q2 2018.
We are now looking forward to a period of strategic growth for Bahrain’s national carrier, and renewed focus on passenger comforts and convenience. Our business strategy for the airline will continue to evolve over time, adapting to industry variables to ensure that we continue to tap into Gulf Air’s truest potential so that we remain a key player in the competitive environment and market in which we operate.
Our aircraft orders secure Gulf Air’s long and short haul network development—in line with our long term network and fleet strategy which will see Gulf Air’s further calculated, strategic growth and development providing the Kingdom of Bahrain with the requisite network connections, maintaining its links with East and West, and providing the needed balance in support of the Kingdom’s economic development.
What is your vision for developing the Arab World’s aviation and tourism sectors—calling for more investment, bilateral trade and job creation?
I always say that the transportation industry is a key driver of economic development and growth in any country. Without the safe and efficient movement of people, goods and information, businesses cannot thrive. The growth of tourism in the Arab world has been a significant factor in driving aviation growth in the region, and we are witnessing a growth in these industries’ contribution to GDP.These industries are critical to stimulating investment, creating jobs and increasing trade.
The aviation sector in the Middle East is experiencing a 7% growth driven mainly by travel demand locally and the healthy growth in the African and Asian regions. This is why you are seeing major investment being made in airport infrastructure across the Gulf, for example. What we would like to see in the future is improvement in airspace capacity, roads network and immigration policies, all of which form part of the framework in which the sector can continue to grow. I am confident that Bahrain is on the right track in this industry. We have a lot more work to do, and all the steps that are currently being taken will help us move in that direction.