MUHARRAQ Municipal Council members yesterday threatened to block the creation of a BD452 million ($1.2 billion) steel plant in Bahrain amid concerns about its environmental impact.

Two of the world's largest engineering consortiums were awarded the contracts for the project in March at a gala ceremony at the Ritz-Carlton Bahrain Hotel and Spa, in the presence of US Ambassador Joseph Adam Ereli.

The engineering procurement and construction contracts were bagged by Kobe Steel of Japan and Midrex from the US, with the latter consisting of three companies - SMS Meer and SMS Concast of Germany and Samsung Engineering of Korea.

The plant is being set up by the United Steel Company (SULB), a joint venture between Bahrain-based Gulf United Steel Holding Company (Foulath) and Japan's Yamato Kogyo Company.

While Foulath is the Middle East's leading steel investment vehicle and holding company, Yamato is one of the world's leading global beams and structural sections producers.

Public Commission for the Protection of Marine Resources, Environment and Wildlife environmental assessment and planning directorate director Zahwa Al Kuwari said pollution levels at Foulath's existing 1.3sqm state-of-the-art steel production complex in Hidd, where the new project would be built, did not exceed the permitted levels.

It would be situated adjacent to GIIC's pelletising plants and SULB's cold rolled stainless steel mill, both wholly owned subsidiaries of Foulath.

Ms Al Kuwari said the commission merely gave recommendations on whether the project would be environment-friendly, with the final permits awarded by the Industry and Commerce Ministry and the municipality concerned.

Council technical committee chairman Ali Al Muqla said residents' complaints about pollution were continuously neglected in favour of industries.

"Everyone knows that Hidd is overpopulated with factories and clouds of pollution can be seen by everyone and here we are obliged to rubber-stamp on one more," he said.

"Until today, no one knows what acceptable standards are and if the commission claims that they only recommend environment-friendly factories, then the clouds in the area must have been caused by aliens.

"I have asked that the project be initially blocked until we get a clear study on its environmental impact amongst other factories within the complex."

Meanwhile, councillors accused area councillor Sameer Khadim of deliberately avoiding voting on the matter after getting BD200,000 to help fund a disabled project in his constituency from the consortiums.

Mr Khadim, who mysteriously missed yesterday's council meeting, told councillors two weeks ago that he had received a cash injection for the stalled venture and no longer required funding.

Ms Al Kuwari revealed the consortiums had paid BD200,000 to fund the project for the disabled to meet residents' demands.

Mr Al Muqla said Mr Khadim's input in the meeting would have been of great help.

"He is one of the biggest campaigners against pollution in Hidd and the country and he would have helped us a lot on what action to take, but he has mysteriously decided not to show up," he said.

"In two weeks' time when we discuss the issue again he could be with us, and then according to what he would say alongside the required studies, we would take a final vote on the issue."

Mr Al Muqla said councillors would also question Mr Khadim about the status of the disabled project in his area.

SULB chairman and managing director Khalid Al Qadeeri told the GDN in March that following the awarding of the contracts, the consortiums would build a 1.8m tonnes-a-year direct reduction iron plant and a 1m tonnes-a-year melt shop and heavy section rolling mill.

He said with the addition of SULB to Foulath's existing complex, they were also creating the world's first fully-integrated steel production facility with manufacturing capability extending from pelletising to the final product.

Neither Mr Khadim nor the Industry and Commerce Ministry could be reached for comment yesterday.

alaali@gdn.com.bh