Bahrain councillors could be set for a dramatic U-turn after initially threatening to block the creation of a $1.2 billion (BD452 million) steel plant in Hidd.

At Muharraq Municipal Council's last meeting before the summer break yesterday, councillors refused to give the plant the go-ahead, casting doubt on an environmental study presented to them.

However, they agreed to approve the factory if Bahrain's environment chief gave it the stamp of approval - and accepted responsibility for any consequences.

It will now be left to Public Commission for the Protection of Marine Resources, Environment and Wildlife director-general Dr Adel Al Zayani to sign a document saying the facility does not pose a threat to the environment.

The council last month voted to refuse a building permit for the plant, citing environmental fears.

But it yesterday voted that developers would also have to present testimonies from existing and former workers of factories based within the complex that they suffered no health complications due to pollution.

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.

'Dr Al Zayani is a trusted man and we would take his judgment for granted as we take a vote in September,' said area councillor Sameer Khadim.

'It is a huge burden on our conscience to approve this factory knowing that it poses a health and environmental hazard, but if the highest government official concerned says it doesn't, we will pass it.'

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 other councillors, saying the money was not collected by him personally, but went directly to the Tafa'ol (Optimism) Society.

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

Khadim yesterday demanded fellow councillor Mohammed Al Mutawa be transferred to a council probe committee, after he repeated allegations that he had taken a cheque from developers.

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

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

Council technical committee chairman Ali Al Muqla doubted Posford's study, accusing Foulath of supplying it with false data.

'In the end, the investor presents necessary documents and samples to the consultant, to which a study is being prepared,' he said.

'The study looks flawless, but looking at the conditions in the complex, I don't believe Posford has ever gone there or dug deep.

'I am certain that there are current employees and pensioners who have fallen sick from the existing complex and I hope that the council would vote to have the investor bring us a list so we could check testimonies.'

Council public relations and information committee chairman Mohammed Abbas said councillors' doubts were baseless.

'We are speaking about a respected investor and an environmental consultant, who before we think about protecting the environment and health had already taken it into consideration,' he said.

'Both don't want to jeopardise their reputation, as it would cost them more, and from what I see the new factory has to go ahead because it is outstanding and doesn't pose any harm.'

Vision

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.

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

'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.'

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