The Bahraini firm, EBH Holdings, and its associates will hold 51 per cent of the equity of the project while the Oberoi group and its associates will hold the rest.

EBH Holdings general manager of C George John, said the project, expected to cost 50 million dollars in the first phase, would be executed in two stages.

Indian ambassador in Manama SS Gill said the project would be the first major joint venture between the two countries.

He said several other projects were under various stages of discussion between businessmen of the two countries. "We hope this project will add to confidence on both sides and lead to more joint ventures between India and Bahrain," he said.

Gill said a major feature of the Oberoi project was that the group itself would invest in the hotel instead of only running it on a management contract.

Theproject will be built on reclaimed land on the man-made `Lulu island' (pearl island), about 100 metres off the northern shores of Manama, John said.

The site, covering a total reclaimed area of 120,000 square metres, will have uninterrupted views of the sea from all sides and will enjoy the benefits of an island resort just ten minutes from the main business district of Manama, he said.

John said the island would be connected to the mainland through a causeway and a wooden bridge.

The first phase of the project would be a five-star hotel with 200 rooms and suites, he said.

The hotel and its facilities will be managed by East India Hotels Ltd, the holding company of the Oberoi group, as an `Oberoi' hotel.

John said the facilities at the hotel would include restaurants, business centre, conference facilities, sporting facilities, health club, a marina and private beaches.

"The hotel will be luxuriously finished to be on par with the best in the world," he said.

The second phase will consist of adeluxe spa complex, consisting of a private beach, luxury villas and Arabic style tents.

He said the site has been leased for a 50-year period from the Central Municipal Council of Manama from February one this year.

"Various consultants for various aspects of the project are being appointed and the reclamation work is expected to begin soon," he said.

John said the project would be implemented by a joint venture company to be known as the Bahrain Grand Hotels Company.

It will have Sheikh Ebrahim Bin Hamad Al Khalifa, chairman of EBH Holdings, as its chairman, and PRS Oberoi, managing director of the Oberoi group, as its vice-chairman.