A $1.2 billion steel plant will go ahead in Bahrain, despite a council bid to block it, a senior government official has declared.

The plant is consistent with the Economic Vision 2030 and national zoning map, said Municipalities and Agriculture Affairs Ministry Assistant Under-Secretary for Urban Planning Shaikh Hamad bin Mohammed Al Khalifa.

Muharraq Municipal Council voted last month to refuse a building permit for the plant in Hidd, citing fears over the environmental impact.

Shaikh Hamad said the zoning map was distributed to all the relevant authorities, including the council, before it was finalised.

Two of the world's largest engineering consortiums were awarded the contracts for the project in March.

The engineering procurement and construction contracts were awarded to 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 will be 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.

'The map, which includes the new plant, was approved last year and ratified by minister Dr Juma Al Ka'abi and even published in the Official Gazette and our website www.urbanplanning.gov.bh,' said Shaikh Hamad.

'The plant will adhere to strict environmental guidelines as per the requirements set forth by the government.

'It is located in the southern-most tip of the Industrial Area in Hidd and it has been zoned for industrial purposes since the establishment of the GIIC plant years ago.

'Therefore, as long as the investor complies with the official zoning list, there will not be a problem in issuing a building permit according to the law.

Foulath and GIIC vice-chairman and managing director Khalid Al Qadeeri told our sister newspaper Gulf Daily News (GDN) that the company was as concerned about the environmental impact as everyone else.

He said that they were given a choice by the commission to choose from four environmental consultants, three local and one international, but the commission appointed Posford Haskoning Environment Gulf to do the assessment, which took around two years.

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 Economic Development Board Chairman, suggested it be built here.

Al Qadeeri said councillors voted against the project, despite the company not yet officially applying for the building permit.

He said that a few days ago his company presented the commission with 15 answers to questions asked by the council, which he hoped would clarify the situation on the factory's environmental position - which he said surpassed 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 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, but went directly to the Tafa'ol (Optimism) Society.

Khadim told the GDN yesterday that the ministry was trying to force the factory on them. 'We will fight against the factory and it is clear that the ministry is keen on having it approved by any means possible,' he said.

'The council didn't accept the zoning map willingly. It was forced on us, without the power at the time to make amendments.

'The zoning map is not the Holy Book and we have the right to protest anything we don't like in it, if those affected are the people who have entrusted us with their vote and their health and well-being.'

SULB told the GDN in March that following the awarding of the contracts, the consortiums would build a 1.8 million tonnes-a-year direct reduction iron plant and a 1 million 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