Interview: Mohamed Abdulghaffar Al Kooheji
Which sectors are likely to drive demand for large-scale infrastructure and construction projects in the coming years?
MOHAMED ABDULGHAFFAR AL KOOHEJI: The government’s push for privatisation in sectors such as health care and real estate can lead to growth opportunities. In this sense, the Ministry of Housing’s focus on real estate development will be a crucial driver of growth. Greater private sector participation in tourism can play a significant role in developing the construction and real estate sectors. There are also many untapped opportunities in the tourism industry, with a high level of interest from neighbouring countries – particularly Saudi Arabia – in developing five-star resorts, waterfront attractions and sport facilities. The value proposition of Bahrain’s tourism sector is quite competitive compared to neighbouring countries.
New initiatives to position the private sector as a driver of economic growth have helped align it with the government’s vision for the economy. Bahrain’s status as a small island nation makes it a friendly and accessible environment, allowing for direct engagement with decision-makers at the ministerial level to solve problems. The synchronisation of the private and public sectors into the government’s long-term plans is crucial. Promising developments in tourism and housing can create significant positive growth in the construction and real estate sectors.
What mechanisms can help to minimise the impact of increasing costs, and how might inflation affect the sector’s future performance?
AL KOOHEJI: The cost of materials used for construction, such as steel, increased considerably between 2020 and 2022, presenting a substantial challenge for the construction industry. However, there is optimism that these issues can be addressed. We have started to see a decline in the cost of raw materials and shipping, making the local market more attractive for long-term investors and developers seeking sustainable returns.
In this context, local construction firms need to take precautionary measures and find supply chain alternatives in other markets that are less affected by the prices of materials and energy costs.
How do you assess the steps taken by local companies to adapt to global sustainability practices?
AL KOOHEJI: In the construction industry, contractors are primarily responsible for executing a project in line with the specifications and design provided. Contractors, therefore, have limited influence on sustainability as it depends on the client’s preferences and third-party entities, such as engineering or design companies. However, there are opportunities to enhance efficiency within the construction industry by boosting labour productivity, utilising construction technology, and employing innovative systems and tools to reduce costs.
Local developers are committed to integrating sustainability into their business operations and buildings, benefitting end users through lower energy and consumption costs. We are already implementing various measures to enhance sustainability, such as utilising and recycling grey water. Water-treatment technology has become more cost-effective in recent years, making it cheaper for companies to implement.
We have also replaced intensive lighting with more efficient LED lights that help to save energy. Moreover, we are incorporating chillers on our sites instead of conventional air-conditioning systems. Although chillers are slightly more expensive, they have a payback period of five years as their use leads to savings of 30-35% in electricity bills. Additionally, we are implementing smart home technologies, including sensors to detect movement and adjust the temperature. We also use inverter systems for refrigerators and other appliances to save energy.
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