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Saudi truckers cash in on Bahrain cement crisis

Manama, July 15, 2008

Saudi truckers are racing across the King Fahad Causeway - to cash in on Bahrain's cement crisis.

Cement factories in Saudi Arabia are trying to push as much cement as they can across the border before the weekly export quota is reached, according to a top causeway official.

He said this had compounded delays already being faced by trucks trying to enter Bahrain from Saudi Arabia.

Meanwhile, Bahrain construction experts say the quota has created a cement black market, with rogue importers charging almost double the price they pay for the cement in Saudi Arabia.

They also said the quota was driving up the cost of developments and adding to project delays.

Saudi Arabia imposed the 25,000-tonne weekly limit on cement shipments to Bahrain last month.

"(Saudi) companies are sending their trucks to export as much cement as possible before the quota is reached for the week," King Fahad Causeway Authority (KFCA) general manager Bader Abdullah Al Otaishan told the Gulf Daily News, our sister publication.

"So the causeway has a number of trucks waiting for their turn. As soon as we reach the 25,000-tonne limit, these trucks are asked to head back."

Al Otaishan said many trucks loaded with cement had to be stopped from crossing the border once the quota had been reached.

However, he added drivers would park up and wait for the next week to start on Saturday so they had a head start in reaching Bahrain.

The new rules were enforced by Saudi authorities following revelations that rogue traders elsewhere were buying Saudi cement at reasonable prices, but then selling it for huge profits on the black market in their own countries.

This meant Saudi Arabia's own supplies were being depleted and although sources previously told the GDN the culprits were not connected to Bahrain, they added that construction companies here had been caught in the "crossfire".

However, while Saudi Arabia is allowing a certain amount of cement to be exported to Bahrain, the quota has inadvertently created a new black market here.

"The quota didn't specify from where the cement should be coming from, so anybody with trucks can load them with cement and sell it in Bahrain without any restrictions," said Bahrain Chamber of Commerce and Industry (BCCI) contractors committee chairman Samir Nass.

"This has led to confusion and now both specialised and non-specialised people are selling cement in Bahrain."

Nass claimed cement cowboys from both Bahrain and Saudi Arabia were cashing in through buying Saudi cement and selling it here for a huge profit.

"These people think it is a good way to earn fast bucks and are causing chaos in the cement market," he said.

"As the Industry and Commerce Ministry in Bahrain didn't impose restrictions on the sale of cement, you can buy and sell it in the market - not only from readymix plants - and make huge profits.

"Cement is sold now in Saudi Arabia for around BD1.5 per bag, but is sold in Bahrain for around double - at BD2.500.

"The decision to open up the cement market aimed to lower prices of cement, but this was a wrong decision and now cement is priced according to the individual's gain - nobody is monitoring the situation."

He added there were now concerns that some suppliers were tampering with cement to make it go further, which meant the quality was deteriorating.

Nass even suggested that some Bahraini contractors could face bankruptcy because their costs were increasing as a result.

They had agreed to complete projects at a specific price, but were now paying higher for cement while also paying salaries over a longer period because of delays in completing projects.

"We might see contractors begging at the doors of Al Fateh Mosque if the situation continues," Nass added.

"They are Bahrainis as well - they need to be backed in this crisi




Tags: Bahrain | causeway | race | Cement Crisis | Saudi truckers |

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