TOTAL CONTRACT VALUE FOR PHASES ONE AND TWO VILLA CONSTRUCTION AND INFRASTRUCTURE AT DURRAT AL BAHRAIN REACHES US$500 MILLION

– Phase Two Villa Construction Launched –

MANAMA –8 August 2006 – Durrat Al Bahrain, the Kingdom’s largest planned luxury residential, commercial and resort development, today announced the awarding of an approximately US$130 million (BD49 million) contract to Bahrain-based G.P.ZACHARIADES LTD for the construction of 318 villas on Atoll Islands 3 and 4, marking the start of phase two of the construction of luxury villas at the landmark project.

Work is scheduled to commence in October 2006 with delivery to homeowners expected in the first half of 2008. With this award, the total value of contracts for both phases one and two villa construction and infrastructure at Durrat Al Bahrain has reached more than US$500 million to date.

Commenting on the announcement, Mr. Abdulhakeem Alkhayyat, Chairman of Durrat Al Bahrain, said, “We are pleased to announce the launch of the next stage of villa construction. With the awarding of this contract, we reach yet another key milestone and come one step closer to fulfilling our promise to eager homeowners that are ready to start the unique resort lifestyle being offered at Durrat Al Bahrain.

“Furthermore, we are delighted to be working in large proportion with world-class Bahraini companies in the establishment of this dream project. To date, 10 tenders have been awarded to local firms. We are both gratified by the strength and competitiveness of Bahraini companies as well as overall positive contribution being made to the economy by the project to date.”

As part of phase one villa construction, work is well underway on 83 villas located on the Petal 1 Island, where the foundations for the homes have already been laid. In addition, construction is scheduled to commence this month on 158 villas located on Atoll 1 and 160 villas on the Atoll 2 Island. All villas included in phase one sales and construction are to be handed over to homeowners from late 2007.

Commenting on the award, Mr. Jassim Al Jawder, CEO of Durrat Al Bahrain, said “We are pleased with the progress being made to date. We are on track in all areas of the project and will be continuing to announce a number of additional contracts in the months ahead for key elements of villa and infrastructure development.”

Durrat Al Bahrain has been planned as a world-class residential, tourist destination, offering a lifestyle experience unrivalled in the Middle East. Upon completion from 2010, it is expected that there will be more than 60,000 permanent residents as well as some 4,500 visitors a day.