BAHRAIN is to build more than 4,000 affordable homes within three years. The Housing Ministry last month signed a landmark public private partnership (PPP) agreement worth BD208 million ($550 million) with real estate and infrastructure development company Nassej to carry out the project.

The deal, believed to be the first of its kind in the Gulf, hopes to help tackle nationwide housing shortages and reduce the government’s waiting list.

“We certainly want to use our own resources in mega developmental projects and encourage private sector and local investors,” Housing Minister Basem Al Hamer said after the signing ceremony.

The event was held at the Ritz-Carlton Bahrain Hotel and Spa under the patronage of Deputy Prime Minister Shaikh Khalid bin Abdulla Al Khalifa and attended by several government officials.

Al Hamer said the agreement would help construct 4,100 housing units and includes the Northern City, Al Buhair Housing and Al Lawzi projects.

“This agreement is considered the biggest of its kind in the ministry’s history in terms of the number of housing units to be built in partnership with the private sector, as part of a series of innovative solutions through which the ministry aims to reduce waiting lists,” said Al Hamer. “We will observe the progress of this project for six months to see it becomes a successful model.We are open to all kinds of ideas as we are running against time and want to use all our resources.”
He signed the agreement with Nassej board of directors chairman Khalid Abdulla Janahi in the presence of Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa.

Janahi said the company wanted to contribute to the development of affordable housing sector in Bahrain. “The core of the project involves delivering more than 4,100 housing units, of which 3,110 are social housing units, within a period of less than three years and with a total cost in excess of $550 million,” he said.

Speaking about the robust consortium assembled for the project, Nassej board PPP steering committee member and board member Mohammed Khalil Al Sayed said it would include Ithmaar Development Company as the development manager, Aecom as masterplanners, URS/Scott Wilson and Ansari Engineering Services as the infrastructure designers, Aecom/Ansari Engineering Services as the house building designers and Davis Langdon as the cost consultants.

“The consortium includes the main contractor, Chase Manara, which is a joint venture between a group of leading Malaysian contractors and a Bahraini company, to ensure that the project’s objectives are realised in full,” said Janahi, adding that Olive VFM is the facility management provider.

Al Sayyed said 30 per cent of the funds for the project would be from equities (30 per cent) and debt (70 per cent). “There are banks, shareholders and investors who are ready,” he said adding that there were also plans to introduce bonds “for retail investors”.

Headquartered in Bahrain, Nasreej is capitalised at $286 million. Its core activities comprise design and masterplanning, development and construction, building components, mortgage facilitation and asset management.

Its key shareholders include Ithmaar Bank, Ithmaar Development Company, BBK, Gulf Finance House, Khaleeji Commercial Bank, Faisal Islamic Bank of Egypt, Palm Capital, Social Insurance Organisation of the Kingdom of Bahrain, and Eskan Bank.

Meanwhile, Al Hamer also said plans were in the pipeline to implement a number of major housing projects in Bahrain.
This includes one in East Hidd Town involving 4,000 to 5,000 housing units that is expected to benefit 30,000 citizens.
He said the ministry also planned to help boost Bahrain’s economy and the construction industry.

Bahrain has been hit by social and political unrest since February last year and improving co-operation between the government and private sector in infrastructure projects was one of the recommendations of a National Dialogue, which was initiated late last year in a bid to ease the unrest and strife which has affected the economy.