Bahrain’s Housing Ministry has received two bids from local companies for the development of a social housing project, after a third prequalified bidder dropped out of the process just before the bid deadline on 12 August.

The project is a key part of Bahrain’s attempts to address a chronic housing shortage for low-income nationals, a key area of concern for the country’s Shia population in the run-up to parliamentary elections to the lower house in late October.

The low bidder is Al-Moayyed International Group with a price of BD217m. The other bidder, Naseej, bid BD260m ($690m) for the project, which involves developing 5,000 housing units. A third local firm, Hafeera Group, had been prequalified for the project, but declined to bid.

Naseej is understood to have appointed PricewaterhouseCoopers and Trowers & Hamlins to act as its advisers on the bid, while Al-Moayyed had not appointed advisers by the time its bid was submitted.

The project requires the winning bidder to construct a minimum of 3,500 social houses. Land will be given to the developer for free, with three sites earmarked for development, Al-Buhari east of Riffa area, an area of reclaimed land known as North Bahrain Newtown and Al-Lawzi.

The Housing Ministry and its advisers, including Ernst & Young and Freshfields Bruckhaus Deringer, have now started bid evaluation work and a preferred bidder is expected to be named by early October, just a few weeks before the elections. One source close to the project says, “Housing is a serious political issue for Bahrain, so there is a lot of political pressure to get this project done.”

The government hopes that this scheme could be expanded to involve the construction of 20,000 homes for low-income Bahrainis under a public-private partnerships (PPP) basis. The waiting list for social housing has hit around 53,000 households.