US embassy cable - 04MANAMA1206

UNCLAS SECTION 01 OF 02 MANAMA 001206 
 
SIPDIS 
 
DEPT FOR NEA/ARP: PHEFFERNAN 
 
E.O. 12958: N/A 
TAGS: ENRG, ECON, BA 
SUBJECT: WATER, POWER AND SECURITY: BAHRAIN'S MINISTER OF 
ELECTRICITY AND WATER WELCOMES CHARGE 
 
REF: MANAMA 496 
 
1. SUMMARY: Minister of Electricity and Water Shaikh 
Abdullah bin Salman Khalid al Khalifa, featured lately in 
local news reports because of a series of rolling 
brownouts, welcomed the opportunity to explain on July 27 
to newly arrived Chargie how his ministry is meeting its 
mandate to produce, transmit and distribute power and water 
in Bahrain.  He explained that the power distribution 
network, designed to accommodate a 20 percent load 
increase, has had to service an 80 percent demand increase 
over the past three years.  Monies for necessary 
infrastructure improvements do not come from consumers, 
since power is subsidized and consumers pay 20 percent of 
operating expenses for water and 75 percent for power. 
(NOTE: Overhead costs are not included in these 
calculations.  END NOTE).  Although multiple ministries 
share control over power and water resources, the Minister 
said he is doing what he can to enhance current service and 
to secure sufficient power and water for the next 15 
years.  A GCC power grid, set for operation in 2008, and a 
possible GCC water-sharing scheme are part of the 
Minister's toolkit.  The Minister, a 36-year veteran of the 
Bahrain Defense Forces, also took this opportunity to 
stress the importance of security in Bahrain and of the 
continuation of our joint security relationship to promote 
regional stability.  END SUMMARY. 
 
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SHARED RESOURCES 
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2. The Minister of Electricity and Water emphasized that 
several ministries have a stake in power and water 
resources: the Ministry of Municipalities and Agriculture 
uses groundwater, the Ministry of Works and Housing uses 
treated sewage water, the Ministry of Health is responsible 
for water quality testing, and the Public Authority for the 
Environment has an interest in the condition of the 
underground freshwater aquifer.  Further, the Ministry of 
Finance and National Economy holds the pursestrings and 
makes decisions regarding facilities, maintenance contracts 
and inputs purchases, such as securing the supply of 
natural gas used to generate power and desalinate water. 
[NOTE: Currently Bahrain depends on domestic supplies of 
natural gas, which just meet current demand.  The Ministry 
of Finance and National Economy is exploring a gas deal 
with Qatar, as part of a possible Qatar-Kuwait pipeline, to 
secure sufficient supplies over the next 10 to 15 years. 
END NOTE]. 
 
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WATER 
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3. Long range ability to supply sufficient water seems to 
be on track.  Bahrain's water supply is currently one-third 
groundwater and two-thirds desalinated water.  Water 
production capacity at Hidd II, now 30 million cubic 
meters, will reach 90 million cubic meters in 2006. 
Further, there are early-stage GCC-internal discussions to 
develop a GCC water linkage to mitigate water shortage risk 
in the region. 
 
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POWER 
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4. On power production, the Minister said that the system 
is working 100 percent.  With the onset of production from 
Bahrain's new Hidd II power/water facility in April, the 
GoB has an 1850 MW capacity .  This leaves a 200 MW 
production margin over current maximum usage during the 
summer months.  [NOTE: The Minister said that 65-70 percent 
of power production goes to air conditioning, so summer 
usage is three times higher than wintertime demand.  END 
NOTE]. As of April, the Government of Bahrain no longer 
needs to purchase 270 MW of electricity from Bahrain's 
aluminum smelter, ALBA, as it had for many years; in fact, 
now the GoB sells its excess output to ALBA in the off 
season.  Further, on July 31 the GoB signed an agreement 
for a private power production facility in Al Azel (see 
reftel), so sufficient production capability seems assured 
over the long term. 
 
5. Power transmission is also proceding according to plan. 
Minister Al Khalifa told Chargie that plans for the GCC 
power grid are on track for the 2008 target completion 
date, reducing the risk of local power outages if a 
production facility temporarily goes offline. 
 
6. The power distribution network is where the Minister 
admitted there are some difficulties that caused brownouts 
earlier this summer.  The network is being used to the 
maximum and needs to be upgraded to handle the loads 
customers demand and the output power plants are able to 
produce, he said.  Outlying areas, populated by Bahrain's 
poorer populations, are most susceptible to power outages, 
in large part because many more air conditioners and water 
heaters were installed there in the last few years without 
accompanying infrastructure improvements.  Implementing 
2006 plans in 2005 should help ease the burden, the 
Minister added. 
 
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SECURITY 
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7. Shifting into Arabic--clearly the Minister's preferred 
language--and to issues close to his heart, 36-year veteran 
of the Bahrain Defense Forces Minister al Khalifa stressed 
to Chargie the need for a safe and secure Bahrain.  He 
emphasized also the need for enhanced regional stability 
and encouraged continued U.S. cooperation on regional 
security matters. 
ZIADEH