Bahrain plans to issue an international tender for its first metro project in the fourth quarter of 2019, seeking private partners to finance a scheme that may cost as much as $2 billion, a transport ministry official told the Al Ayam newspaper.
The ministry has finalised the feasibility study for the project, which will cover a 109 kilometre area and is expected to be built in four phases over a four-year period, the newspaper reported on Monday, citing Abdul Rahman Al Janahi, the adviser to the transport minister.
The metro, cost for which will range between $1bn to $2bn, will most likely include a partnership with a foreign party to help finance and manage the project, he said.
Bahrain will be the fourth country in the Arabian Gulf to build a metro, following in the footsteps of Dubai, the first city in the region to inaugurate the service in 2009, and Saudi Arabia and Qatar, which are building metros in their capital cities of Riyadh and Doha.
Bahrain, the smallest economy in the Gulf, is developing a number of projects to help lift non-oil gross domestic product, improve its infrastructure and create jobs.
The government is investing in projects that include the $3bn Alba Line 6, which will make Bahrain home to the largest single-site aluminium smelter in the world, a further $1.1bn is being invested in modernising the airport and $335 million is being lined up for a new Banagas plant.
Bahrain’s economy is poised to grow 3.2 per cent this year and the region's smallest crude producer is forecast to cut its fiscal deficit to 11 per cent of GDP in 2018, a senior International Monetary Fund official said in May. The shortfall reached 14 per cent of GDP last year and was as high as 18 per cent of GDP in 2016.
The country's finances, which have been strained under the three-year oil price lull, received a boost in June when the island kingdom announced it had won pledges of financial support from its GCC peers to help its economy.
Bahrain's credit rating will depend on the size, timing and the form of the financial support pledged by its Gulf allies to ensure fiscal stability of the kingdom's financial institutions, Moody's Investors Service said in June. It will need around $2.3bn to $2.8bn in the second half of 2018 and more than $4bn next year to finance its budget deficit and service its debts, according to the rating agency.