Bahrain is following Dubai's example by focusing on the logistics industry in a big way. But the Bahrain Logistics Zone will not be a competitor, says Assistant Director-General Hamad Fakhro - instead it will complement the logistics facilities in Dubai.

What is the idea behind the establishment of the Bahrain Logistics Zone?

The zone will be an alternative to the well-established logistics cluster in Dubai. Dubai has played a very important role in turning this region into a logistics hub.

Our vision is to become an alternative logistics hub in the Gulf serving markets such as Saudi Arabia, Iran, Kuwait, Qatar and, in the future, Iraq. Bahrain has built a new port with a water depth of 15 metres that can handle mother ships. Besides the state-of-the-art port we have an excellent operator in APM Terminals - the second largest port group in the world operating at about 50 terminals across the world.

Unprecedented growth, not only in the Gulf but in the Indian Subcontinent and northern Africa, places enormous demands on the existing business, transportation and logistics infrastructure.

As a result alternative options become a prerequisite to sustain the region's growth. And the Government of Bahrain is looking at all ways of creating employment and boosting its economic performance.

How feasible is it for you to create an alternative logistics park in the region?

We divide the Gulf into two areas. The upper Gulf includes Qatar, Saudi Arabia, Kuwait, Iran and potentially Iraq and the lower Gulf is the UAE, Oman and perhaps Yemen. Bahrain is in a strong position because it is located between the two Gulf areas and can serve both effectively. Bahrain's strategic location provides easy access to markets totalling more than $400 billion (Dh1.46 trillion) in imports. Logistics companies are looking for two major elements - delivery time and cost savings.

When mother ships come to Bahrain we can supply feeder vessels to all the other Gulf states, which saves time - this has been scientifically proved by APM. APM is talking to shipping lines about using transshipment through feeder vessels and has signed up with the government to run the transshipment business in Bahrain. The current volume of 250,000 TEUs at the Khalifa Bin Salman Port, where the zone is located, will rise to 1.1 million TEUs and to 2.5 million TEUs during the second phase of expansion. Even though Bahrain's consumption will remain the same most of the 2.5 million TEUs will be for transshipment. Currently the Saudi market is the biggest in the Gulf and one of the biggest in the Middle East.

Logistics companies are looking at the proximity provided by Bahrain and the efficiency of its causeway to establish hubs. DHL's main hub is in Bahrain. We have the infrastructure and we are adding to it.

How much is the Bahrain Government spending on achieving its vision?

The government is spending more than $2.9bn on upgrading the airport cargo area. It is building a new port to be ready in less than four months. The road network is being improved. Construction of the logistics zone, which will be built in three phases, is expected to cost $280m. Infrastructure work on the project is already under way and is expected to be completed in September.