Bahrain has issued a request for proposals (RFP) to three consortiums to bid for the contract to develop a social housing scheme in the country.

The project involves the construction of 5,000 housing units featuring a minimum of 3,500 social housing units, and the rest being developed for a slightly higher income bracket, classed as affordable housing.

The three consortiums are understood to be led by local developers, including Al-Moayyed International Group and Naseej, a real estate and infrastructure development company launched by a group of regional investors in June 2008.

The three consortiums invited to bid on the project is a significant reduction from the 15 potential bidders who attended a conference in Manama in February.

A source close to the project says the RFP was issued on 14 April and bidders have been given three months to respond. The development will be split across three locations, Al-Buhari east of Riffa area, an area of reclaimed land known as North Bahrain Newtown and Al-Lawzi. The land will be given to the winning consortium for free.

Another source close to the project says there will be a government guarantee on the scheme in order to get banks to finance the project. Bidders will be required to supply committed financing for their bids on the project, the source adds. Manama has been looking at what level of support from the government is necessary to encourage private finance for the scheme.

The Housing Ministry is being advised by Ernst & Young, the UK’s Mott MacDonald and law firm Freshfields Bruckhaus Deringer. The project will be a pilot scheme to help address a chronic shortage of housing in the country, and one of the island’s most contentious political issues.

If the housing scheme is a success, it could be rolled out to see 20,000 low-cost homes developed on a public private partnership (PPP) basis.