The Airport Sector in Bahrain and Qatar

An Expert's View about Air Transportation Support Services in Bahrain

Posted on: 6 Oct 2010

Bahrain plans to expand and develop it’s existing terminal, new VIP terminal and an airport centre. In Qatar, opportunities exist in international airport, planned aerospace city project , aviation services.

THE AIRPORT SECTOR IN BAHRAIN THE AIRPORT SECTOR IN BAHRAIN ACCESSING INTERNATIONAL MARKETS ACCESSING INTERNATIONAL MARKETS MARKET REPORT The Airport Sector in Bahrain and Qatar A range of UK Government support is available from a portfolio of initiatives called Solutions for Business (SfB). The ?solutions? are available to qualifying businesses, and cover everything from investment and grants through to specialist advice, collaborations and partnerships. UK Trade & Investment is the government organisation that helps UK-based companies succeed in the global economy, and is responsible for the delivery of the two SfB products ?Developing Your International Trade Potential? and ?Accessing International Markets?. We also help overseas companies bring their high-quality investment to the UK?s dynamic economy ? acknowledged as Europe?s best place from which to succeed in global business. UK Trade & Investment offers expertise and contacts through its extensive network of specialists in the UK, and in British embassies and other diplomatic offices around the world. We provide companies with the tools they require to be competitive on the world stage. For further information please visit www.uktradeinvest.gov.uk or telephone +44 (0)20 7215 8000. Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation and Skills, and the Foreign and Commonwealth Office) accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published April 2010 by UK Trade & Investment © Crown Copyright. URN 10/894 1 2 Contents The Airport Sector in Bahrain Country statistics and background 2 Doing business in Bahrain 5 Aviation and airport sector overview 9 Contacts 23 The Airport Sector in Qatar Country statistics and background 24 Doing business in Qatar 27 Aviation and airport sector overview 30 Contacts 42 This report was compiled by Andy Sampson, Commercial Manager NATS Services Ltd, and Board Member of the British Aviation Group, on behalf of UK Trade & Investment. Andy Sampson Commercial Manager Tel: +44 (0)7500 809548 Email: andy.sampson@nats.co.uk NSL Headquarters, 2nd Floor, Heathrow House Bath Road, Middlesex TW5 9AT, UK www.nats.co.uk THE AIRPORT SECTOR IN BAHRAIN The Airport Sector in Bahrain COUNTRY STATISTICS AND BACKGROUND Official name Kingdom of Bahrain Capital Manama Official language Arabic. Business language is mainly English Government Government Constitutional monarchy King Hamad Bin Isa Al Khalifa Prime Minister Khalifa bin Salman Al Khalifa Crown Prince Salman Bin Hamad Al Khalifa Country Data Total area 720km² / 281 sq miles Population 1.05 million (2007) Population mix Bahrainis 50 per cent, 50 per cent expatriates mostly from Asia and Europe Religion Islam 81 per cent, Christianity 9 per cent, Other 10 per cent Currency Bahraini Dinar (BHD), pegged to the US$ Time zone UTC+3 Dial code +973 Working week Sunday-Thursday. Weekend is Friday and Saturday Business hours Government: 07:00-14:00 Private sector: 08:00-13:00 and 15:00-18:00 Economic Statistics (2008) GDP US$26.75 billion (+7 per cent) GDP per capita US$37,200 Inflation 7 per cent Unemployment 15 per cent (2005 estimated) Main industries Petroleum processing and refining; aluminium / iron processing; fertilisers; banking; insurance; ship repairing; tourism Balance of trade Exports: US$19.17 billion. Imports: US$15.64 billion 2 THE AIRPORT SECTOR IN BAHRAIN Background SAUDI A MANAMAt just 30 miles long by 20 miles wide, the Kingdom of Jidd Hafs Bahrain is the smallest country in the Arabian Gulf, but Al Budayyi Mina Salman ARABIA nevertheless is one of the most influential. It consists Isa Sitrah of two large islands, Bahrain and Muharrq, and literally Umm Ar Rifa al Gharbi translated its name means ?two seas?. In common with Nasan many other countries in the region, pearls formed the Island Al Malikiyah Awali basis of the economy until the 1930?s. However, in 1932 Bahrain was the first Gulf country to discover oil and Askar Az Zallaq this was the catalyst for huge levels of growth in the Jaww petrochemical industry. At this stage, Bahrain was under Ad Dur British control, and the oil discovery helped cement Al Amar relations between the two countries, a relationship that continues to the present day. The oil crisis of the BAHRAIN 1970?s forced diversification of the economy and Bahrain overtook Beirut as the Middle East?s financial hub, a position it has largely retained. In 2008, moreover, Bahrain was voted the world?s fastest-growing financial centre by the Global Financial Centres Index from the City of London. To this day, it is renowned for its friendly open manner, easygoing lifestyle, tax-free environment SAUDI ARABIA and excellent leisure facilities, and has been rated the BAHRAIN most socially liberal country in the Gulf by the Oxford Business Group. QATAR SAUDI SAUDI Geography QATAR ARABIA ARABIA Qatar lies approximately 50km to the south-east, and Saudi Arabia lies just to the west. Since 1996, Saudi Arabia has been connected to Bahrain via the King Fahd Causeway, which has seen huge amounts of vehicle traffic coming into Bahrain from Saudi Arabia, particularly at weekends when long queues at the border are common. The causeway has also aided growth in the Bahraini airport sector, with many Saudis now using Bahrain as their departure airport due to the greater range of flights and destinations offered compared to Riyadh and Dammam. A similar link is also planned between Bahrain and Qatar, although work on this has yet to commence. 3 THE AIRPORT SECTOR IN BAHRAIN However, this only tells part of the story, and petroleum Political Structure production and refining still account for over 60 per cent Bahrain gained its independence from the UK in 1971, but of Bahrain?s export receipts and government revenues. was affected by sporadic political unrest through the early The global financial crisis, unemployment amongst 1980?s and late 1990?s. In 1999, King Hamad succeeded his young Bahrainis and the gradual depletion of both oil and father as head of state, and this has brought increased underground water resources are considered by some to political stability, culminating in Bahrain officially becoming be long-term economic problems. a Kingdom and holding parliamentary elections in 2002. The King remains the head of state, with the government being headed by the Prime Minister who presides over a In order to arrest any slide and to achieve further economic 25-member cabinet (although much of this cabinet is drawn growth, the Bahrain Economic Development Board (EDB) has been established with the aim of providing an from the Royal Family). Supporting this are two further economic development strategy for the Kingdom and to legislative chambers: the Shura Council is the upper house and is appointed by the King, while the lower house is the create a preferential climate for inward investment. It is elected Chamber of Deputies, which is largely dominated chaired by the Crown Prince and comprises key ministers, by Shia and Sunni Islamists. government officials and a number of leading executives from the private sector. Key achievements to date include While considerably more stable than in previous years, bringing the F1 Grand Prix to Bahrain, liberalisation of the political conflict does still exist. This is chiefly around the telecoms industry, the aforementioned FTA with the US, and appointed Shura Council, the slow pace of change (caused the transfer of Bahrain International Airport (BIA) to the by the country being ruled by many of the same ministers Mumtalakat-controlled Bahrain Airport Company (BAC). for decades), and the lack of legal and institutional backing Importantly, for companies seeking to export to for politicians and those promoting political change. Bahrain, the EDB has established the Bahrain Investors Centre (www.moic.gov.bh/MoIC/En/More/Resources/ Economy BahrainInvestorsCenter). This acts as an investor Recognising the fragility of an economy based solely upon facilitation service, providing information and assistance oil, Bahrain has made great efforts to diversify, and in in understanding the market, government rules and 2008 was reported as ?the most diverse and sustainable regulations and procedures for establishing a presence 1 within the Gulf Co-operation Council (GCC) ? and as within Bahrain. having the ?freest economy in the Middle East? in the 2 2009 Index of Economic Freedom having been placed in Tourism is a growing sector in Bahrain, which has had 16th place worldwide, ahead of countries such as Japan a positive effect on airport growth. While most of the and Germany. Oil and gas production now contribute only eight million annual visitors are still from within the around 30 per cent of GDP, with finance and manufacturing region (particularly Saudi Arabia), there are increasing being the largest sectors aided by the de-regulation of numbers coming from further afield due to Bahrain?s liberal labour markets and economic reforms. Additionally, in 2006 approach, its climate and the prominence of sporting to further assist growth, Bahrain implemented a Free Trade events such as the F1 Grand Prix. Agreement (FTA) with the US, the first between a Gulf State and the US. 1 ?The Growing Beyond Oil Report? Conference Board August 2008. 2 2009 Index of Economic Freedom: The Heritage Trust and Wall Street Journal. 4 THE AIRPORT SECTOR IN BAHRAIN Taxation DOING BUSINESS IN BAHRAIN In common with most GCC states, there is a liberal tax Business Environment regime in Bahrain, with no personal income tax, capital The conventional division between government agencies gains tax, wealth taxes or withholding taxes. However, and the private sector is less defined in Bahrain and the since summer 2007 a number of taxation measures Middle East in general. This can sometimes lead to the have been implemented, which cover both employers emergence of politics in decision-making processes, and employees: particularly if well-established local business interests are threatened. To help counter this issue, tendering laws were Social Insurance Tax: introduced in 2003, and the Bahrain Tender Board now All employees (Bahraini or expatriate) pay 1 per cent processes all tender decisions valued above BHD10,000 on salary. (£16.5K) or higher. Below this, individual ministries and departments may still process projects independently. Social Security Tax: That said, the Tender Board may still approve single tender This is aimed at providing disability and death benefits for action if the nature of the work is highly specialised Bahrainis, and employment injury insurance for all workers (i.e. there are only a very limited number of suppliers of the whether Bahraini or expatriate. Any company with greater specific product or service) or there is an urgent safety than 10 employees pays 10 per cent of employees? gross or time-constrained need. Limited tenders are also used income. Employees contribute a further 5 per cent. with a shortlist of pre-qualified companies, but again this is subject to Tender Board approval. Property Rental Tax: Applies to companies or individuals renting property. The reputation and connections of local agents do still have The amount of this varies according to whether the some influence on contract decision making, but there is more property is furnished or unfurnished and whether it is for transparency in Bahrain than in many Middle Eastern countries. commercial purposes. 5 THE AIRPORT SECTOR IN BAHRAIN In general, establishing a business presence in Bahrain is Specific Advice for UK Companies straightforward, and the government actively continues to The UK continue to be well thought of in terms of high seek inward investment. Any company wishing to establish quality products and services, and remain one of the most a presence will need to register initially at the Bahrain popular countries with which to do business. There remain Investors Centre (BIC), located at the Seef Mall. BIC will strong cultural links between the UK and Bahrain, and advise on aspects such as work and residency permits, types our temperament is more closely aligned to that of the of business presence, commercial licenses and registration Bahrainis than some other EU nations. fees. BIC has also produced an excellent guide, Setting up a However, the visit highlighted a number of areas where business in Bahrain, which can be downloaded from UK companies could improve their chance of winning www.bahrain.com/information-brochures.aspx. contracts, or ease contract management issues: This gives highly detailed advice on type of business presence, commercial registration and licensing requirements. n Flexibility: despite being more liberal then most in the GCC, Bahrain still has an Arabic approach to doing The legal system in Bahrain is relatively mature and business that is more leisurely than the west. Some is based around a UK system. Aside from the normal UK companies have come into the country unprepared requirements for bid and performance bonds, and some for this, and the need to be flexible, and to manage the requirements for insurance, UK companies should have expectations of the local Bahraini business community fewer problems in Bahrain than in neighbouring states. was stressed. Government Tenders n Pricing: Some UK companies continue to utilize As outlined above, rules exist for contracts above BD conventional payment terms for contracts. Flexible payment and lines of credit are becoming increasingly important for 10,000, and the expectation for the airport development Bahraini customers. In addition, cash flow is an important project is that most will be run through this process. issue to consider, as payments can sometimes be slow to Tenders are generally run with the involvement of the emerge from the bureaucratic process. The advice received Bahrain Tender Board who place adverts on their during the visit is for UK companies to tailor business plans website through the following link: to the local environment and make sufficient provision www.tenderboard.gov.bh/newsite/TenderNotices.aspx within risk budgets. This website is also a useful source of general information n Support: There is a perception that some European on the tendering process. Public Tenders are process and SE Asian companies provide higher levels of after driven but also highly transparent, with Tender opening sales support than UK companies. This seems to be sessions held every Thursday morning in the presence particularly true in the airport GSE market, where this of the Tender Opening Committee, purchasing authority issue is particularly important for the buyer. Where representatives and bidders representatives. Results are possible UK companies should seek to stress this recorded in the ?List of Bid Prices?, which is immediately aspect within bids. displayed on the Tender Board website and within the Tender Board opening hall. 6 THE AIRPORT SECTOR IN BAHRAIN Visa information Visas are required by all visitors to Bahrain except passport holders of the GCC States. If travelling from the UK on a EU/ British passport you will generally be granted a Two Weeks Tourist Visa for a fee of BD5 conditional upon: n A valid, up-to-date passport n A return or onward ticket n An undertaking not to engage in any employment Tourist visas are also issued to citizens of Australia, Canada, Hong Kong, Japan, New Zealand and the USA. Anyone wishing to live and legally work in Bahrain will need to apply for a Work Visa and a Residency Permit. These will generally require: n A Sponsorship Letter indicating the employer?s name/organization, commercial registration number, employee?s capacity, salary, contract duration, employee?s name, birth date and nationality n A Copy of the relevant contract Social Issues n Health records from an authorised clinic The Government?s continues to push forward the For up to date advice on the specific requirements of ?Bahrainisation? of the labour force as a key policy. establishing a presence, companies should seek advice However, a number of social issues still remain including: from the British Embassy and the Bahrain Investor Centre in Seef Mall. n Religious tension between Sunni and Shiite sects n Long waiting lists for social housing n A lack of a proper skills training and apprenticeship system, or any real industrial training programmes. To aid this, the Government have implemented the 2 per cent social tax, but as with all systems it will take some time for monies to flow through to promote fundamental change. 7 THE AIRPORT SECTOR IN BAHRAIN Business etiquette Bahrain is one of the most liberal and tolerant country within the GCC with fewer restrictions on alcohol consumption and dress code than most. The exception remains the Ramadan period when it remains forbidden to eat, drink or smoke in public during daylight hours. In terms of business etiquette the following serve as a guideline: n Dress code: There are no specific restrictions or requirements for dress code, aside from normal business attire during meetings. Western business attire is more acceptable for ladies in Bahrain than in other GCC countries although it is still considered polite to have shoulders covered at all times. n Greeting: When doing business, handshakes are always used and can last a lot longer than in UK. If introduced to a Bahraini woman as a male, it is advisable to wait and see if a hand is extended. If it is not, then do not try to shake hands. The converse sometimes applies, with Bahraini men being reticent to shale hands with a western woman. n Meetings: In Middle Eastern culture, it is often the n Hospitality: In formal meetings Arabic coffee is served case that initial meetings are focused on relationship as a ceremony for visitors and guests and is a symbol building. Time is often spent in light conversation and of harmony and trust. Served in small cups with no to establish an atmosphere of openness and friendship handles, it should be accepted with the right hand. before embarking on business matters. Refills will be offered, and normal convention is to signal when you are finished by shaking the cup from side to side and handing the cup to the coffee server rather than putting the cup down on the table. n Punctuality: As a guest in the country it is advisable to be punctual for meetings. Arabic timekeeping is somewhat more liberal and it is not uncommon for schedules to drift, but it is not a sign of disinterest if the meeting doesn?t start on time. Decisions are made more slowly than in UK, partly because decisions often take place by consensus. 8 THE AIRPORT SECTOR IN BAHRAIN Much of the development of the airport has been slow to AVIATION AND AIRPORT SECTOR ? happen, but in the last 5 years, there has been a period OVERVIEW of more rapid change caused by regional air transport Civil aviation has been a key enabler to the growth of growth, and the development of a more commercial airport Bahrain since the discovery of oil, acting as a gateway structure. The effects of these changes have been felt between east and west, a natural stopping?off place for within Government ministries, the airport company, handling early trade routes and more latterly one of the hub airports companies and Gulf Air. for the Northern Gulf. The main ministries and agencies now involved with the airport and its operation are shown below: Of these, the most significant was the creation of the Bahrain Airport Company (BAC) in 2008, and the subsequent transfer of airport operations to BAC in July 2009. This has created a defined split of regulatory activities from the service delivery aspects of the airport, and which is now driving the development of the airport and its masterplan. 9 THE AIRPORT SECTOR IN BAHRAIN Department of Civil Aviation Affairs Overview and Structure In common with many other countries in the region, the The Bahrain Department for Civil Aviation Affairs (CAA), is CAA approach to the development of air transport has the regulatory authority for all air transport activities within been to adopt an ?Open Skies? policy, enabling Bahrain to the Kingdom, and up until July 2009, was also responsible establish itself as a financial centre as well as providing for the operational management of Bahrain International the opportunity for Gulf Air and other carriers to operate Airport. However this has now transferred formally to on an unconstrained basis. In addition to its regulatory Bahrain Airport Company (BAC), although the CAA retains responsibilities (including operating permits and licensing, control of a number of key operational agencies across the overflight permissions, airworthiness etc) the CAA also has airport including Air Traffic Control and Meteorology. responsibility for ensuring compliance with international safety and security standards, and ICAO SARPS. The current CAA structure is shown below: 10 THE AIRPORT SECTOR IN BAHRAIN ATC Issues Aviation Services Directorate Ground congestion: Caused by the lack of aircraft parking Air Navigation Services stands and parallel taxiways this will be partly solved by the The Air Navigation Directorate is responsible for providing addition of 9 new Code C stands to the east of T1 in mid 2010. Air Traffic Control (ATC) services within the Bahrain Flight Radar coverage: Certain areas of the Bahrain FIR and the Information Region (FIR) and in and out of Bahrain Airport. southern area of Saudi Arabia have limited or no radar This involves handling around 315,000 movements per coverage. This does cause congestion and delay issues, annum within the Bahrain FIR, of which around 85,000 particularly during Mecca. In addition, there is very limited arrive or depart Bahrain International Airport. Through radar coverage in the southern part of Iraq, which required its engineering section, the Directorate also procures, the Bahrain ATC staff to provide additional separation operates and maintains all aeronautical navigation and to traffic routing in that direction. The lack of a defined communication services including HF/VHF/UHF radio overflight charging regime in Iraq is enticing more carriers services, aeronautical telecoms and radar systems. to fly this way, thereby exacerbating the congestion and workload issues. The ATC service is provided from 2 facilities on the airport with a mix of local and ex-pat staff: Airspace Capacity: the rapid growth of Dubai and to a lesser extent Abu Dhabi and Qatar have put additional strains on n the main Visual Control Tower adjacent to the main the airway system, especially given the requirement for terminal building which provides Aerodrome and non-radar separation in certain areas. New airways are being Ground control. planned but reaching agreement with the authorities in Abu Dhabi has been a slow process. Whilst this is not a purely n the Air Navigation Services HQ which provides radar Bahrain issue, the problem of capacity through the region is Approach and En-Route services. The Area control causing many to suggest a Centralised Flow Management service comprises 4 sectors (West, East and Central) Unit similar to that in Europe to address capacity vs demand. although more are planned to help address airspace However, this is a highly political issue due to: capacity issues that cause delays within the region. n A number of states believing they should host this Unit There are 4 traffic peaks through the day: 07:00-10:00, n The conflict between Flow Management and 12:00-14:00, 17:00-19:00 and 23:00-03:00 although Hadjj traffic Government policy in the region for ?Open Skies? inbound to Mecca can see traffic increase by 25-30 per cent. Demand at the airport is around 300 movements per day, with Positive progress is being made on the latter point, but a peaks at 20-22 movements per hour from the single runway. location is yet to be agreed upon. ATC Equipment n Voice Communications: Frequentis / Park Air n Radar Sensor: Selex n Radar Automation System (Radar Data / Flight Data processing): Thales EuroCat n ILS: Thales n DVOR/DME: Denro n Voice recording: Audiosoft n Monitors: Barco 11 THE AIRPORT SECTOR IN BAHRAIN Air Transport Division Prior to the transfer the directorate was responsible for: The Air Transport Directorate is the main policy and n Cargo and Commercial Facilities (cargo operations, regulatory department, and is responsible for bilateral/ lease management, car parking) multilateral agreements, airline permissions, schedule n Terminal Services (facilities management, cross approvals, travel/cargo agency approvals and compliance terminal co-ordination with customs, police etc) with ICAO SARPS. n Airside Services (airside operations & parking allocation) In addition the Directorate: n Special Services (VIP) n Drafts and implements local air transport policies and n Fire Services: regulations n Aviation Security: n Develops appropriate rules and regulations in accordance with ICAO SARPS Engineering & Maintenance Division n Represents Bahrain within the regional civil aviation arena. As the name suggest, the Engineering and Maintenance Directorate, is responsible for the design, procurement, Aeronautical Licensing Division operation and maintenance of most facilities, equipment The Aeronautical Licensing Directorate has the state and systems within the Airport excluding certain equipment responsibility for enacting ICAO safety and licensing covered by the ATC directorate such as radar and responsibilities. This covers: communications systems. n Airworthiness (registration, certificates, auditing, They are also responsible for registering and pre-qualifying maintenance approvals) contractors working on the airport. n Aviation Permits and Licensing (aircrew, engineer and ATC licences, bird strikes, training and examinations) These include: n Aircraft Operations (Air Operator?s Certificates, flight n Runway, Taxiways and Aprons training and testing, accident investigation) n The Terminal Building, Control Tower, Fire Station and n Aviation Safety Rules and Regulations (Bahrain CAA other Structures. Rules and aviation safety standards) n The road network, signage, street lights, car parks and landscaping works. Airport Services Directorate n Airfield Lighting management and maintenance. n Power substations and network. Airport Division n Water network (including storm water) Until July 2009, the Airport Directorate was responsible for the n The air conditioning and chilled water systems. overall management and operation of the Airport. However, n The Baggage handling systems with the creation of BAC the majority of these functions will n The MT unit including of Fire Fighting Special Vehicles transfer to BAC. Many former CAA staff are already under BAC management. control (particularly for terminal services) although the exact n The storm water and sewer drainage pumping systems plan and final timeframe for all departments remain unclear, and network. and it is likely that some sections will remain under CAA control n The perimeter of fence. for the foreseeable future. n System Control and Facilities Maintenance on a 24 hours basis. n Registers, classifies and prequalifies all contractors. 12 THE AIRPORT SECTOR IN BAHRAIN However, with the signature of the MoU between BAC BAC have now developed a clear objective of raising Hochtief Facilities Mnagement, the role of the Division the profile and status of the airport through the airport is set to change over the coming months, and which development project and have a strategic master plan for responsibilities will be retained remain uncertain. the airport which aims to: n Add extra capacity to the airport?s terminals in Meteorology Directorate accordance with the master plan. The Bahrain Meteorological Services also comes under n Enhance the existing business model and the responsibility of CAA, providing a comprehensive n Increase the efficiency of operations. national meteorological service on a 24 hour basis. Weather n Diversify airport activities. reports are also prepared for presentation on radio and n Maximise return on investment. TV . Observations are reported from the Airport and local weather stations and terminal and area forecasts are The first move on implementing this strategy has been to prepared at regular intervals. employ the services of Munich Airport to examine Ground Handling (currently provided by Bahrain Airport Services). VOLMET and SIGMET services are provided on a Menzies Aviation are already understood to be on the shortlist 24 hour basis. Bahrain is an active member of the World of companies that BAC would like to see at the airport. Meteorological Organization (WMO) who?s regional office is located in Bahrain. BAC have also signed an MoU to establish a joint venture with Hochtief Facility Management, to take over the Bahrain Airport Company responsibility for all technical systems, energy management and infrastructure at the airport. The MOU, planned to have The Bahrain Airport Company (S.P.C) was established in a term of at least 15 years, stipulates that Hochtief will be 2008 and in July 2009 was made formally responsible for managing and operating the Bahrain International Airport. handle technical and infrastructural building management. This includes buildings such as the terminal, aircraft hangers, BAC is wholly owned by Bahrain Mumtalakat Holding cargo halls, and administrative buildings. Company which is the investment arm of the Kingdom of Bahrain and will operate as a commercial entity. The role of Mumtalakat is significant as it is also a majority shareholder The driver behind all these activities remains the BAC CEO, Dr Osama Al Ali and in discussions held during the visit, in Gulf Air, the national telecoms operator Batelco and the National Bank of Bahrain and holds a 30 per cent stake in he stated his desire to move forward on the development McLaren F1 Group. project as soon as possible, and whilst the Tender Board will be fully involved in the process, BAC would be driving the decisions on selected contractors. Although it has been in existence for some time, the role of BAC in the airport has only become fully defined in the last 12 months, and until the transfer of the operational ? BAC?s strategy is to use Bahrain?s open staff from CAA, its workforce numbered less than 10 staff. skies policy, its naturally convenient This staff transfer had been delayed by discussions over location, and its welcoming culture the terms of transfer for the staff, but these issues have been resolved, and the transfer of the first 400 staff is now to transform BIA into a regionally underway with more to follow through 2010. renowned and globally competitive player in the aviation industry.? 13 THE AIRPORT SECTOR IN BAHRAIN However, in more recent years its importance has been Bahrain International Airport eroded by the development of longer range aircraft, and Since opening in the 1930?s, Bahrain International Airport emergence of strong completion as a hub in the shape of has always marketed itself as providing a gateway to the both Dubai and Qatar. Today whilst not being a leader, it Northern Gulf. Through the 1960?s to the early 1980?s it was remains an important hub and is now the operating base for an important fuel stop for flights routing to Asia as well as Gulf Air which accounts for around 40 per cent of the total supporting the oil trade. movements at the airport. in their own ?state? airlines. As a new low cost operator, Airlines Bahrain Air has also become a significant contributor in Airline activity is dominated by Gulf Air, with over 45 per cent terms of flights across the Gulf and between them, the two of the total movements at the airport, much of this being airlines make up around 60 per cent of the total movements. transfer and transit traffic. Bahrain is now the main operating Of the remainder, only DHL with their base cargo operations base for the airline following the decision of all the original makes a major contribution. founding partner countries to sell off their stakes, and invest 14 THE AIRPORT SECTOR IN BAHRAIN Passengers A key feature of the passenger mix is the high percentage The current airport was originally designed to handle in the of transfer passengers, currently around 50 per cent of the region of 3 million passengers per annum, and although some total through the airport, but around 75 per cent-80 per cent developments have taken place, in 2008 the airport witnessed of the Gulf Air passenger mix. This remains a strong growth growth of 20 per cent. The terminals are now handling close area for the airport, but puts a strain on the infrastructure to 9 million ppa and although growth through 2009 has been on a daily basis particularly at peak times. more modest at around 4-5 per cent this continues to put a significant strain on all aspects of airport infrastructure. The prime destinations for the airport remain Dubai with Cargo over 60 rotations per day and Doha, whilst other key The 18,000m² Cargo Terminal is operated by Bahrain Airport markets are London, Kuwait, Abu Dhabi, Riyadh, Manila Services and handled approximately 350,000 tonnes in 2008. and Mumbai. The airport management are acutely aware of However this has seen sharp falls of around 20 per cent in the competitive nature of Gulf Aviation and are adopting a tonnage since 2007 and has continued to fall by a further strategy based upon 10 per cent in 2009. Up until this point, growth had been driven by Bahrains position as the DHL Middle East Regional n A continued ?Open Skies? policy Distribution Centre with 15 aircraft permanently based at the n A high number of flight frequencies to intra-Gulf airport. Other major cargo and logistics agencies also use destination the aiport including FEDEX, TNT Express, Aramex and Global Logistical Services(GLS), and it has become the hub for operations to support the reconstruction of Afghanistan and Iraq. The Saudi Arabian market is also significant, especially since the construction of the Bahrain-Saudi causeway, and over 3 million tonnes of cargo use this route annually. 15 THE AIRPORT SECTOR IN BAHRAIN Airport Operations Airport Development Until recently the airport was operated under a conventional One of the key issues for is the lack of passenger and stand state owned model, with all responsibility vested with the capacity which is now driving the Airport Development Government Department for Civil Aviation Affairs (CAA). Project. This will concentrate on creating additional However, in 2008 the Bahrain Airport Company was formed capacity and developing facilities for both passengers and by Mumtalakat, Bahrain?s investment company, to manage cargo up to around 2030. full details are contained in the the entire operation of the airport, with the intention that relevant section but in summary the project includes: the CAA would transfer managerial responsibility for the airport to focus on regulating and enforcing aviation rules n The creation of several new passenger terminal and policies within Bahrain. On 11th July 2009 Mumtalakat facilities announced the formal transfer of operational management n Additional stands and associated infrastructure of Bahrain International Airport to Bahrain Airport Company n Upgraded areas for cargo and logistics services, (BAC) from the Civil Aviation Authority, and the gradual n MRO facilities transfer of responsibilities has been taking place since that time. This will involve the transfer of the majority of the staff The design contract for two new terminals at Bahrain from the Airport Services Directorate to BAC. International Airport will go to tender within the first quarter of 2010 with bidding for the first construction contract within the first half of 2010. 16 THE AIRPORT SECTOR IN BAHRAIN n Engineering: BAS line Maintenance provides H24 Ground Handling ? Bahrain Airport Services maintenance support to airlines including ground (BAS) checks and aircraft refuelling. The engineering Background & Operations department also has the responsibility for the Bahrain Airport Services (BAS) is responsible for providing procurement and operation of all of the GSE equipment all Ground Support Services (GSS) at Bahrain airport, on the airport including tugs, PCA units, GPU, and and with a workforce of 2,000 employess is one of the top various high lift devices. This equipment supports both employers in the Kingdom. Having been established in 1977 the passenger and cargo operations. they are one of the oldest GSS organisations in the region, and were founding members of the Gulf Airports Services n Catering: Operating out of an 12,000sqm facility, the Association (GASA) which brings together handling Catering Department prepares approximately 8 million organisations across the Middle East. Ownership is split in flight meals per year. between YBF Kanoo (30 per cent), Gulf Air (30 per cent) and 5 local companies each holding 85 each. Procurement As the main procurement customer for GSE in Bahrain, BAS currently hold the monopoly on all GSE at Bahrain. BAS are an important player in the export market for UK However in the past few months, BAC have started a companies. Their procurement process follows the rules of process to introduce competition to this market and have the Bahrain Tender Board, with most opportunities being employed Munich Airport as to advise on a framework for run via competitive tender process, and all purchases made more competitive environment. in Bahraini Dinars. Operations are run through 4 main departments: Although tenders are still advertised through conventional adverts in the Bahrain press, all opportunities are n T raffic: Front line ground handling including passenger advertised on the on the BAS website check in, baggage handling, load control, operations http://www.bas.com.bh/tenders2.htm and aircraft ramp handling. BAS are also responsible for some terminal facilities including the award winning Current procurement strategy is for consolidation wherever ?Delmon? VIP Lounge. possible in order to reduce costs, and they have already pursued a policy of standardisation on vehicle chassis. n C argo: The cargo department manages the 18,000sqm They are also seeking to establish framework contracts for Cargo Centre which handles around 200,000 tonnes of suppliers, with a maximum of 2 manufacturers per equipment cargo per annum. type. Penetration by UK companies is currently quite low, but the British CEO is keen to see this change. Any UK company wishing to supply should concentrate on reliability and the provision of enhanced. long term support packages. Contact details for BAS are shown in the main ?Contacts? section. 17 THE AIRPORT SECTOR IN BAHRAIN At time of writing, bids for conceptual designs have just Bahrain International Airport Development closed, however it is uncertain as to which plan bidders will Project be working to, or whether they will be required to submit Background an alternative ?third option?. Bidders for this work are In 2006 in response to the increasing demand and capacity understood to be: issues the Bahrain CAA (as airport operator) commissioned a BD126m (£205m) expansion programme. This expansion n Hok, plan covered the development and expansion of the existing n Naco, terminal and construction of a new VIP terminal and an n ADPi, airport centre. After a competitive tendering process, the n Mott MacDonald, contract for the masterplan was awarded to a consortium led n Jacobs Gibb, by Jacobs Gibbs via their UK offices, and also involved HOK, n Dar al Handasah. and Salahuddin Consulting Engineering as a local company. Whichever option is chosen, the funding for the programme is coming from a combination of the Ministry of Works and Mumtalakat. Given current fiscal pressures, the Ministry may pursue some form of external investment but no decision on this has been made. Notwithstanding the current uncertainty on the plans, the project is starting to move forward and organisations whose involvement has already been announced include: n Hill International: Project management consultancy services for the airport development project. The contract is believed to be worth BHD 13.4 million (£22 million) and covers a four-year initial term with a four year extension option. Hill?s responsibilities will include planning, time control, time management, and the preparation and evaluation of contractual documents. n Cavotec: This order is associated with the current However, the establishment of the Bahrain Airport construction of remote stands to the east of the Company (BAC) as the airport operator in 2008 prompted terminal building and covers for the supply of 18 ?Pop an examination of the Jacobs submission, and BAC up? ground service equipment at an estimated value of commissioned a consortium involving GE, Avia Solutions £30 million. Each stand system includes 400Hz power and Llewelyn Davies to produce a revised plan. This is supply systems, a vacuum system, a blue water supply considerably more ambitious than the Jacobs Plan, and system and a potable water supply. The installation provides for a much larger passenger terminal development work commenced in late 2009 and is due for completion on the south side, an extensive land reclamation project in February 2011. for cargo operations and most significantly a second parallel runway. At close to BD1.8 billion (£2.9 billion) it is also significantly more expensive, a fact that has caused considerable debate across the aviation community. 18 THE AIRPORT SECTOR IN BAHRAIN n Parking stands: Construction of an additional 18 stands The Jacobs Plan (up to Code E size) to take parking capacity up to a The Jacobs plan looked at the development of the airport maximum of 64 aircraft. up to approximately 2030, and recognised the key growth n Air bridges: Increase from 7 air bridges to 14, two of constraint to be the passenger terminal capacity. Once which will be A380 compatible. completed, the Jacobs plan will take capacity up to 15 n Car parking: The current facilities only provide parking million passengers per annum. Terminal area will increase facility for 900 cars. A new 4 -storey facility will be from the current 51,000m² Terminal One extended towards capable to accommodate 3,000 cars. the east eventually reaching 125,000m². The single runway would be retained up until around 2020. The GE Plan The GE Plan also looks to develop in Phases up to 2030 The Jacobs plan looks at developing in 3 phases: but considers a much larger approach to expanding the infrastructure. The key difference in this plan is the location n Phase 1: Control Tower to Terminal 1. This land is of new infrastructure on reclaimed land, the use of land to currently unoccupied and the first part of the extension the north of the current runway and the construction of a will comprise new terminal facilities in this position. 2nd runway from 2015. n Phase 2: Terminal 1 re development ; The current A 5 Phase plan has been outlined: terminal 1 will be partly demolished and re-built. During this time all passenger traffic will use the new Phase 1: Masterplan to end 2010: This will take passenger Terminal constructed in Phase 1. This second phase capacity to 10.5 million ppa and involves: will completely redevelop passenger facilities, baggage handling facilities and will add additional stands / n Start construction of Terminal 1A to the SE of airbridges. Once completed the 2 facilities will be the current terminal. Terminal 1 will remain in combined and will increase capacity to 15 million ppa. 2 operation. This will have an area of 72,000 m and will accommodate 12 mppa. n Phase 3: Development to the West. With the two new n Construction of Terminal 2 and associated transport facilities constructed and in full operation, further stand and baggage infrastructure (possibly a ?Fast Build and passenger terminal development will continue to Terminal?) to the east of the control tower. This will the west which will include the construction of up to 2 have an area of 15,000 m and will accommodate 3 five additional Code C-stands. This will require some mppa. These passengers will primarily be non-hub of the land currently occupied by the cargo terminal, flights transferred from T1. which will be gradually re-located to a new site on n Procurement of private land to the North in order to reclaimed land to the north of its current position. safeguard future development. n Commencement of land reclamation to the SW and NW Main elements of the expansion programme are: of the airport to support future cargo operations. n Commencement of the ?Airport City? development n Check in: Expansion from approximately 25 to 80 check which will include a hotel and swimming complex. in counters. n Baggage handling:The baggage will be expanded from 3,000 bags per hour to 15,000 during the expansion. The area for baggage reclaim will be widened. Baggage will be screened through 80 check-in counters. 19 THE AIRPORT SECTOR IN BAHRAIN Phase 2: Masterplan to 2012: This will take passenger n O pening of 3000m Runway 2. The close spacing with capacity to 13 million ppa and involves: runway 1 could only allow dependant operations but with an offset threshold, some capacity improvements could n Opening of Terminal 1A in Spring 2012. be gained when operating in an easterly direction. n Demolition of current T1, although a link pier to existing n C ommencement of West Apron development (west of stands will be retained. T1) comprising 2 cul de sacs for Code c and n Commencement of East Apron development adjacent to Code E aircraft. T1A with six Code E stands in a cul de sac arrangement. n O pening of the new DHL Cargo facility on reclaimed n Commencement of Northern Site development. This will land to the NW, linked by 2 parallel taxiways. involve the construction of a Code E Northern taxiway, a new Executive Terminal, hangar and apron, fire station Phase 5: Masterplan to 2030: This will take passenger and car parking. capacity to 16.8 million ppa and involves: n New Royal Pavilion and hangar on the reclaimed land to the SW. n C ommencement of Terminal 1 Phase 3 development. 2 This will add a further 30,000m and will raise capacity Phase 3: Masterplan to 2015: This will take passenger from 17 mppa to 22 mppa. Total area of T1 will be 2. capacity to 14.2 million ppa and involves: 130,000m n Opening of Terminal 2 Phase 3. This will add a further 2 n Commencement of East Apron Phase 2 development 5,000m and will raise capacity from 5 mppa to 8 mppa 2 with 2 further cul de sacs and parking for up to 24 n Full opening of the new 679,000m Cargo facility. Code C aircraft. n Commencement of Terminal 2 Phase 2 development. Conclusions 2 This will add a further 5,000m and will raise capacity At the time of report research (late November 2009), the ?GE from 3 mppa to 5 mppa. Plan? is the one being officially pursued, and it has received n Development of a Tracked Transit System (TTS) to link considerable press coverage which has majored not only on T1 &T2. the scale of the development but on the passenger facilities n Opening of Cargo Village extension of approximately including the Airport City leisure complex. However its price 2 800,000 m . This includes aircraft parking, warehouses tag has caused some concerns, and from discussions during and ancillary facilities. Once this is opened the current the visit, it is clear that the plan has its detractors. The global cargo village will be closed to be re-developed. downturn has meant that the ?Jacobs Plan? has not been 2 n Development of new MRO facilities of approx 350,000m formally cancelled and discussions during meetings showed opened on the reclaimed land to the SW. continued support for this plan due to its more pragmatic n Commencement of works on Runway 2,400m to the approach in terms of cost. The emergence of the Third Plan north of Runway 1. has further confused matters. Phase 4: Masterplan to 2020: This will take passenger Coupled with this is a recent Government decision to capacity to 16.8 million ppa and involves: transfer BD 30 million (£50 million) out of the airports budget into roads for 2010, and rumours of political tension between n Commencement of Terminal 1 Phase 2 development. the Crown Prince and the Prime Minister. 2 This will add a further 30,000 m and will raise capacity from 12 mppa to 17 mppa, and will also integrate the terminal building with the airport city complex. 20 THE AIRPORT SECTOR IN BAHRAIN A final decision is expected in early 2010, but whichever Airside & Terminal facilities plan is pursued it seems clear that it will be driven by n Passenger terminal foundations BAC as the new operator, and any UK company seeking n Terminal construction involvement should channel their approached through BAC n Terminal equipment (check in, FIDS, duty free, lounges, in the first place. baggage handling and reconciliation, passenger transit systems, air bridges, security screening equipment etc) n Terminal systems ? WAN/LAN Opportunities for UK Companies n Taxiway and apron signage and lighting systems With such a major development planned, its unsurprising that n VIP / General aviation terminal and associated facilites the opportunities for UK industry revolve around the Airport n Construction of MRO and supply of all associated Development Project. However for GSE companies, there equipment remain opportunities to become framework suppliers through Bahrain Airport Services or with alternative companies now Process being brought in to add competition to the market. The majority of procurement will be via the established Airport Development Project competitive Tender Board process. According to BAC CEO, Dr Al Ali, his criteria for selection will be 70 per cent technical Given the size of the budget, the Airport Development and 30 per cent financial. The likely process for major Project offers huge opportunities UK companies in a wide packages will be: variety of areas. However, with the uncertainty regarding the masterplan choice (Jacobs vs GE vs the Third Plan), n Pre-Qualification / Expression of Interest. This is no formal procurement timetable has yet been published. likely to involve open invitations via Pre-Qualification However, the first RFP?s likely to be issued by BAC in early questionnaires, and the evaluation of responses via a 2010 are: weighted matrix. However, some tenders may be via invitation to participate (ITP) only. Invitation to Tender? n Land Utilisation project Up to 10 companies will be invited, with a response time n Formal Design & Supervision of between 4-10 weeks depending on complexity. n Piling for T1A n Tender Opening / Evaluation: This will involve the Open Thereafter further packages will depend on which Bid process, with final selection of preferred bidder masterplan is being followed, but are likely to include: based upon BAC recommendations Earthworks Whilst procurement will be an open process, BAC will n Excavation and necessary landfill for new terminal inevitably feel more comfortable purchasing from those buildings and ?Airport City? companies with whom they either have a relationship, or n Land reclamation understand the products and services on offer. For this n Paving (taxiways, aprons) reason the CEO advised that ALL UK companies wishing n Landscaping to be involved in the development project should set up n Utility systems (central plant, waste & potable water meetings and provide BAC with marketing information as distribution, electrical distribution & ducting, IT) soon as possible. n Airside / landside roads Site Utilities n Operations office n Security systems n Fuel systems (fuel farm, distribution, tanker stations) 21 THE AIRPORT SECTOR IN BAHRAIN Where to find tendering information Sources of information for the tendering process include: Bahrain Airport Services (GSE) www.bas.com.bh/tenders2.htm Bahrain Tender Board www.tenderboard.gov.bh/newsite/TenderNotices.aspx Bahrain Airport Company (BAC) www.bac.bh/ Department of Civil Aviation Affairs www.caa.gov.bh/new_tenders.htm Bahrain Airport www.bahrainairport.com/bia/tenders.htm 22 THE AIRPORT SECTOR IN BAHRAIN Bahrain Airport Services CONTACTS PO Box 22285, Kingdom of Bahrain Department for Civil Aviation Affairs www.bas.co.bh Bahrain International Airport PO Box 586, Kingdom of Bahrain Phil Bowell ? Chief Executive Officer www.caa.gov.bh Tel: +973 1732 1700 Mob: +973 3994 4808 Capt. Abdulrahman Mohammed Al Gaoud Email: phil.bowell@bas.co.bh Undersecretary for CAA Tel: +973 1732 1100 Gulf Air Fax: +973 17 33 9066 PO Box138, Kingdom of Bahrain Email: aralgaoud@caa.gov.bh www.gulfair.com Ahmet Nemat Abdul Rahim Capt Chris Cain ? Chief Operating Officer Assistant Undersecretary for Aviation Services Tel: +973 1733 8005 anematali@caa.gov.bh Mob: +973 3960 0365 Tel: +973 1732 1011 Ministry of Works Nabeel Al Taqi ? Assistant Undersecretary for Airport PO Box 5, Manama, Kingdom of Bahrain Services www.mwh.gov.bh ntaqi@caa.gov.bh Tel: +973 1732 1150 Zaher Atiyani ? Technical Advisor to the Undersecretary Fax: +973 1732 9119 Tel: +973 1754 5633 Mob: +973 3913 3726 Saleem Mohammed Hassan ? Chief Air Traffic Management Email: zaheraa@works.gov.bh saleemmh@caa.gov.bh Tel: +973 1732 1117 British Embassy Bahrain Mob: +973 3960 8860 P.O Box 114, Kingdom of Bahrain www.uktradeinvest.gov.uk Bahrain Airport Company PO Box 24924, Kingdom of Bahrain Rececca Topping ? Head of Trade & Investment www.bac.bh Tel: +973 1757 4113 Mob: +973 3975 0496 Dr Osama Al Ali ? Chief Executive Officer Email: rebecca.topping@fco.gov.uk Tel: +973 1735 3300 Fax: +973 1792 0444 Kelly Botham ? Trade & Investment Officer Email: osama.alali@bac.bh Tel: +973 1757 4124 Mob: +973 3940 7045 Email: kelly.botham@fco.gov.uk 23 The Airport Sector in Qatar COUNTRY STATISTICS AND BACKGROUND Official name State of Qatar Capital Doha Official language Arabic. Business language is mainly English Government Emir H.H Sheikh Hamad Bin Khalifa Al-Thani Prime Minister H.E Sheikh Hamad Bin Jassim Bin Jabr Al-Thani Heir Apparent H.H Sheikh Tamim Bin Hamad Al-Thani Country Data Total area 11,437km² (approximately half the size of Wales) Population Est 1.6 million (2009) Population mix Est 20 per cent Qatari. Arab, South and East Asian, European and American expatriates make up the balance Religion Islam Currency Qatari Riyal (QAR) pegged to the US$ at $US1=QR3.64 Time zone GMT+3 Dial code +974 Working week Sunday-Thursday. Weekend is Friday and Saturday Business hours Government: 07:30-14:30 Private sector: 08:00-13:00 and 16:00-20:00 Economic Statistics (QNB Economic Review Oct 2009) GDP US$100,407 million GDP per capita US$64,661. Nominal GDP growth of 40.9 per cent in 2008. Qatar?s nominal GDP is forecast to grow by 31 per cent in 2010 Inflation 15.1 per cent (2008) Economically active population 1,168,081 people Exports Liquefied natural gas (LNG), petroleum products, steel, fertilizers 24 THE AIRPORT SECTOR IN QATAR Background Qatar is an independent state in the Southern Arabian Gulf Madinat ash Shamal and has been ruled by the Al-Thani family since the Ar Ru?ays mid-1800?s. Since the discovery of oil in 1937, it has Al Khuwayr Al Khuwayr transformed itself from a British protectorate into the Uz Zubara world?s leading supplier of liquefied natural gas, and now Al Ghuwayriyah Madinatal Kaban has the one of the highest GDP per capita in the world. Adh Dhakhirah Qatar gained its independence from the UK in 1971. Al Khawr QATAR Geography Al Jumayliyah The Qatar peninsula extends approximately 160 kilometres Bir Zikrit north into the Persian Gulf from the Arabian Peninsula, with Umm Salal Muhammad Dukhan its sole land border being with Saudi Arabia. The land is Shahaniya DOHA mainly flat and rocky with the highest point being only 103 Ar Rayyan meters above sea level. Of the islands belonging to Qatar, Umm Bab Al Wakrah Halul is the most important, acting as a storage terminal Al Wukayr for oil from the surrounding offshore fields. Hawar and the Karanah adjacent islands immediately off the West Coast are the Musayid subject of a territorial dispute between Qatar and Bahrain. The capital, Doha, is located on the central East Coast Al Kharrarah and is dominated by its long corniche. In recent years, development of the city has focussed on the West Bay area and the area to the north. The new airport project has also resulted in significant land reclamation activities to the south of the city. SAUDI ARABIA Economy Throughout the global financial crisis the Qatari Government Qatar has experienced rapid economic growth over recent has sought to protect the local banking sector with direct years on the back of high oil prices, and in 2008 posted investments into domestic banks. The drop in oil prices its eighth consecutive budget surplus. Economic policy is in late 2008 reduced Qatar?s budget surplus and slowed focused on developing Qatar?s natural gas reserves and investment and development projects in 2009. Qatar increasing investment in non-energy sectors, but oil and gas National Bank forecast Qatar?s nominal GDP would contract still account for more than 60 per cent of GDP and roughly by 5 per cent in 2009 but grow by 31 per cent in 2010. 85 per cent of export earnings. Proven oil reserves of 15 billion barrels should enable continued output at current levels for 37 years, and Qatar?s reserves of natural gas are nearly 900 trillion cubic feet , about 14 per cent of the world total and third largest in the world. 25 THE AIRPORT SECTOR IN QATAR Political Structure The 1970 ?Basic Law? declared Qatar a sovereign Arab, Islamic state. The Emir holds sovereignty, but the constitution also provides for a partially elected consultative assembly, the Advisory Council. Rule is hereditary within the family of Al-Thani, and power is transferred from father to son. The Advisory Council consists of thirty members and its constitutional rights include the right to debate legislation drafted by the Council of Ministers before they are approved and declared. The constitution also provides for a Deputy ruler, who assumes the post of Prime Minister. However, in practice, it is the Emir who holds the ultimate power and may Taxation extend or modify his powers by personal decree. According to Forbes 2009 Index, Qatar has the world?s friendliest tax climate. Qatari companies are exempt from Cultural Factors any tax, and there is no personal income tax for either Most Qatari?s adhere to the Wahhabi sect of Islam, which nationals or ex-patriots. However, the rules are different for also dominates Saudi Arabia, although unlike its neighbour, foreign companies, and any business activity carried out in Qatari Wahhabism, is less strict. Alcohol, which is strictly Qatar is subject to corporate income tax. This includes any prohibited in Saudi Arabia, is available in Qatar (through services or consultancy contracts within the state as well a licensing system) and there is no prohibition on women as any gains on property. driving cars. Arabic is the official language, though Doha?s sizable populations of expatriates mean that English is Until 2009 the corporate income tax system was based widely spoken. on a banded structure depending on income, with rates applied from 0 per cent - 35 per cent. However, a new tax The current Emir has been responsible for considerable law was approved by the government in 2009, and came liberalisation and the establishment of a Human Rights into force from January 1, 2010. This introduces a new flat Committee to ensure equality and greater human rights. rate of corporate income tax of 10 per cent across the board In recent years Qatar has placed significant emphasis regardless of company income. The new law also focuses on education, driven in part by the Emir?s second wife, on other key areas of taxation, including withholding tax, Shiekha Mozah Bint Nasser Al-Missned. All citizens are and transfer pricing and provides for a Committee to be now required to attend government provided education established, which will evaluate applications for exempting from kindergarten through to senior school. Qatar University certain projects carried out by foreign companies. was founded in 1973, and the Qatar Foundation has assisted with the opening of several American branch campuses in Whilst the change has been welcomed by big business, the new Education City. Education City is also home to the SME?s are less happy claiming that it will adversely Qatar Academy, and in 2009 the Qatar Foundation launched impact their margins. However, at the time of writing the the World Innovation Summit for Education, a global forum communication of the precise details of the new law had that brought together education stakeholders and decision been slow, and some uncertainty remains about how and makers from around the world. where it will be applied including whether the rates apply to turnover or profit. UK companies are advised to seek specialist assistance. 26 THE AIRPORT SECTOR IN QATAR Visa information DOING BUSINESS IN QATAR British nationals can obtain visas at immigration on arrival at Business Environment the airport. They cost around QR110 (roughly £20) and must The Qatari market is competitive with many companies be paid for with a credit card (no cash accepted). The visa from across the Middle East, US, Europe and Asia. Historic lasts for one month and can be extended for a further month. links between the US and Qatar in the oil and gas sector have helped make US companies particularly strong in all Getting Around Doha markets, including aviation, although Japanese and German Unlike most other cities in the region, getting around Doha companies are also strong. can be a challenge. Although it is not a large city there is heavy traffic congestion at peak times and the number When bidding for business it?s important to understand that of taxis is relatively low. They are often difficult to hail in the concept of ?value? is not currently well understood in locations other than major traffic junctions, and although Qatari business. The tendency remains to go straight for the both Fox Taxi?s and Karwa offer a ?dial a cab? facility, waits lowest cost bid, unless there is either a good relationship can be lengthy at peak times. Outside of hiring a car, the most or a powerful business argument for doing otherwise. reliable way of ensuring transport is to either hire a driver for Businesses that demonstrate a willingness to invest in the day, or to obtain the personal phone number of the taxi Qatar through a local presence are also appreciated and driver that picks you up at the airport. The competitive nature this often leads to increased follow on business. Although of business means that most will be more than happy to act the rules for establishing a permanent presence have as a personal chauffeur for the length of a business visit. Cars been relaxed, the process can still take several months to with drivers can also be hired from car rental companies complete. Agents or distributors are not always required, including Avis, Budget and Hertz. but where they are, the process of selection can be time consuming and challenging. Another aspect to note is that addresses are often given as P.O. Boxes rather than street names. When making Initial success is often built on solid research and appointments it is worthwhile obtaining clear and up to date companies are advised to invest in market research before directions in relation to well known landmarks or buildings entering the marke
Posted: 06 October 2010