Bahrain's construction industry is on the brink of a major crisis after cement imports from Saudi Arabia were halted in a row about prices, according to businessmen.

Sources said manufacturers from the neighbouring country, which supplies 75 per cent of Bahrain's demand, had increased prices by 11 per cent from BD25 to BD28 ( $66.3 to $74.2) per tonne.

However, Bahrain's Industry and Commerce Ministry has reportedly refused to accept the price increase and halted all imports.

'We are soon going to have a major crisis since local manufacturers are not able to meet the demand,' said a representative of a major contracting company engaged in at least one massive infrastructure project.

'We are now scrapping the bottom of the barrel but the situation is fast deteriorating.'

The businessman said talks between the ministry and cement importers were taking place in a bid to resolve the crisis.

Another contracting company official said his firm had also run out of cement.

'We are in a fix because we cannot use locally produced cement at this stage in our project because of a product mismatch,' he said.

The official said his company had been barred from importing from Saudi Arabia and had nowhere else to turn.

'We are ready to pay the higher price but we are not being allowed to do that,' he said.

Sources earlier told the Gulf Daily News, our sister publication, that Saudi manufacturers were already selling cement in their own country at BD26 per tonne and were not prepared to sell it at a lower price in Bahrain.

'Since they get more money in Saudi Arabia, they are within their rights to refuse,' they said.

Sources revealed manufacturers also indicated they want the price to eventually go up to BD32 per tonne. 'If this continues, the industry will be in crisis. There has to be a solution,' they added.

Sources said Bahrain's ready mix plants had been operating at a fourth of their capacity following the halting of cement imports.

Industry and Commerce Ministry officials were unavailable for comments on Thursday.

Bahrain's construction industry has been dogged by problems in recent years.

In 2008 Saudi Arabia, in a bid to regulate cement exports, made it mandatory for importers to require 'special permission' from the capital Riyadh for each truck crossing into Bahrain.

Cement imports by road were later banned and importers only allowed to import 25,000 tonnes per week by sea.

Sources said this arrangement had been going well with local producers chipping in to meet demand in Bahrain.-TradeArabia News Service