Muharraq Municipal Council members yesterday blocked the building permit of a BD452 million ($1.2 billion) steel plant in Bahrain.

Councillors had initially blocked plans for the plant in Hidd at their meeting on May 12.

However, they decided to take a final vote on the project yesterday to allow area councillor Sameer Khadim to attend since he was absent at the meeting.

Khadim was originally accused of intentionally missing out the meeting, as councillors claimed that he had received BD200,000 as a donation to a society for the disabled.

However, he yesterday hit back, saying that the money was not collected by him personally and that it went directly to the Tafa'ol (Optimism) Society.

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, in the presence of US Ambassador Joseph Adam Ereli.

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

Council acting chairman Abdulnasser Al Mahmeed urged councillors yesterday not to look at an environmental study presented by the developers, saying that it was easy to buy.

He said that it was wrong to have developers present their own environmental studies, demanding that the government started hiring environmental consultants.

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

It said the consortiums had paid BD200,000 to fund a project for the disabled to meet the residents' demands.

'The existing complex already has committed various environmental violations and giving another facility next to it the go ahead will be an additional disaster that residents have to cope with,' said Khadim.

'We are against any new factory that will come to Hidd, whether this or any other in the future,' he said.

'There is no criteria for environmental-friendliness and until the public commission or anyone else in this country explains it to us then, from my part, I will have residents agree with the project.'

Council technical committee chairman Ali Al Muqla said that the environmental study presented by developers was comprehensive.

'My committee studied the project and it fulfils the standards on paper, but in the end, as my colleagues have said, most don't tend to abide to environmental standards after they open,' he said.

'I can't say that about this factory, but current violations from the existing complex makes me hesitant to recommend it.'

Al Muqla had earlier said that residents' complaints about pollution were continuously neglected in favour of industries.

He said Hidd was overpopulated with factories and clouds of pollution could be seen everywhere.

SULB told our sister newspaper Gulf Daily News (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