A multi-million-dinar financing agreement to advance Phase Two of the Shaikh Jaber Al Ahmad Al Sabah Highway project is set to be debated and voted on by MPs on Tuesday.
The major infrastructure project is considered essential for reducing congestion and bolstering economic growth in Bahrain.
The proposed law ratifies a framework agreement between the government of Bahrain and the Kuwait Fund for Arab Economic Development, under which the fund will provide concessional loans worth up to 70 million Kuwaiti dinars (around BD85m) to help finance the project.
The total cost of the second phase is estimated at BD128.6m, with the remaining amount to be covered by the state budget.
Parliament’s financial and economic affairs committee, which examined the draft law over four meetings, has recommended approval.
The second phase of the project – as revealed by Works Minister Ibrahim Al Hawaj to Parliament – will see Shaikh Jaber Al Ahmad Al Sabah Highway widened from three lanes to four lanes in each direction over 11km, alongside the construction of service roads, parking areas and major upgrades to stormwater drainage, lighting and traffic systems.
Plans also include the construction of five flyovers and the development of Shaikh Salman Al Fateh Highway, which branches off the main highway and will be expanded to four lanes over a stretch of around 2km.
The minister told the committee that traffic studies indicate the upgrades will increase road capacity by more than 65pc and cut waiting times at intersections by up to 90pc, significantly easing congestion along one of Bahrain’s busiest north-south corridors.
Committee chairman Ahmed Al Salloom said the agreement represents a strategic investment in Bahrain’s transport network.
“This project is not just about expanding a road; it is about supporting economic activity, improving traffic safety and enhancing connectivity between key governorates,” he said. “The committee found that the financing terms are favourable and appropriate for a project of this scale.”
The agreement covers seven separate loans, each capped at 10m Kuwaiti dinars, to be disbursed annually in line with the project’s progress. Each loan will be governed by a separate agreement, all falling under a single financing framework.
According to the Finance and National Economy Ministry, the loans come with highly concessional terms, including an interest rate of 3.5pc, a grace period of up to eight years, and a repayment period of up to 20 years.
“These are among the best financing terms available for infrastructure projects,” Mr Al Salloom said. “They reduce pressure on public finances while allowing the kingdom to deliver a mega-project that has long-term economic returns.”
Mr Al Salloom
Mr Al Salloom said these improvements will have a direct impact on daily life and business operations.
“The road connects residential, industrial and commercial areas, including Alba, the Bapco refinery and the Nuwaidrat Industrial Area,” he said. “Reducing congestion here means faster movement of goods, shorter commutes for workers and fewer accidents.”
The committee also examined the social and environmental impacts of the project, which is expected to improve access to Sitra Housing and support long-term job creation by stimulating economic activity.
Addressing questions about the higher cost of Phase Two compared to the first phase, Mr Al Salloom said the difference reflects the larger scope and complexity of the current works.
“The two phases are not directly comparable,” he said. “Phase Two involves multiple major intersections, extensive widening and additional infrastructure elements that naturally increase costs.”
The agreement also includes safeguards ensuring that no other external loan takes priority over the Kuwait Fund’s financing, while exempting the loans and related documents from local taxes and fees.
Mr Al Salloom stressed that parliamentary oversight would continue throughout implementation.
“Parliament will continue to monitor progress to ensure that the project is delivered on time, within budget and in line with national development priorities,” he said.
mohammed@gdnmedia.bh
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