Developers of a $1.2 billion steel plant in Bahrain have threatened to move the project to another country if councillors continue with attempts to thwart the plan.

The Muharraq Municipal Council blocked the Hidd plant's building permit last month 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.

The engineering procurement and construction contracts were bagged by Kobe Steel of Japan and Midrex of the US.

Midrex consists 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. The factory would have been situated adjacent to GIIC's pelletising plants and SULB's cold rolled stainless steel mill, both wholly-owned subsidiaries of Foulath.

The Public Commission for the Protection of Marine Resources, Environment and Wildlife earlier told councillors that pollution levels at Foulath's state-of-the-art steel production complex, where the new project would be built, did not exceed the permitted levels.

Foulath and GIIC vice-chairman and managing director Khalid Al Qadeeri said the company was concerned about the environmental impact like everyone else.

'We had been given a choice by the commission to choose from four environmental consultants, three local and one international, but the commission then took the decision for us by appointing Posford Haskoning Environment Gulf to do the assessment, which took around two years,' he said.

'The company had nothing to do with the study, which was acknowledged by the council to be comprehensive, despite accusations that it could be bought, which with a well-known firm like Posford is difficult, considering that their funding is not also coming from us.

'We are one of Bahrain's biggest investors and for the past 25 years have significantly helped the national economy and were known protectors of the environment in the area.'

Al Qadeeri, who is also Usco and Sulb chairman and managing director, said the steel factory was originally intended for Qatar but His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and EDB Chairman, suggested it be built here.

'Thankfully this was fulfilled and although councillors voted against the project, despite us not presenting them with an official request for the building permit, as a way to show their stand against anything they believed may harm the environment,' he said during a Press conference at the Gulf Hotel.

'We are still hopeful that it would go ahead or else we will take it away to somewhere else.

'We don't want that and a few days back we presented the commission with 15 answers to questions asked by the council, which we hope would clarify the situation on the factory's environmental position - that we can assure will surpasses both Bahraini and international standards.'

It was announced last month that the consortiums paid BD200,000 to fund a project for the disabled to meet residents' demands.

Area councillor Sameer Khadim was originally accused of intentionally missing out the first meeting on the project, after councillors claimed he had received BD200,000 as a donation to a society for the disabled.

However, he hit back at the meeting where the final vote was taken, saying the money was not collected by him personally and it went directly to the Tafa'ol (Optimism) Society.

SULB told the Gulf Daily News 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.

It said with the addition of SULB to Foulath's existing complex, it was also creating the world's first fully-integrated steel production facility with manufacturing capability extending from pelletising to the final product. -TradeArabia News Service