The joint venture of Turkey’s IC Ictas and the local Al-Rashid Trading & Contracting, which was awarded the SR2.2bn ($587m) renovation contract for Riyadh’s King Khalid International airport, is engaged in discussions with potential baggage handling system (BHS) suppliers, according to a source with knowledge of the transaction.

It is not clear if a public tender or a direct negotiation will be the preferred procurement method for the package.

MEED understands the joint venture is currently holding discussions with a number of firms including Germany’s Siemens and the Netherlands’ Vanderlande.

The renovation work on the airport commenced earlier this year although slight revisions on the concept design are still ongoing.

The $2.1bn renovation work on the four old terminals at the airport is expected to be completed in 2021.

The IC Ictas/Al-Rashid team initially lost its bid for the contract to upgrade the terminals in 2015 to a joint venture comprising Germany’s Hochtief, local Nahdat al-Emaar and India’s Shapoorji Pallonji. The contract with the Hochtief-led team, however, was cancelled in 2016.

Unlike the cancelled contract, which calls for the construction of new concourses, the new contract entails mainly renovation and refurbishment works that aim to expand the terminals’ capacities and improve services.

The redevelopment of the airport will be conducted in phases, starting with terminals 3 and 4.

Terminal 4 is unused and Terminal 3 previously catered to domestic flights, which have been moved to the newly completed Terminal 5.

Succeeding phases will entail redevelopment work for terminals 1 and 2, which cater to international flights.

Terminal 5, which was completed in 2016, is being operated and managed by Dublin Airport Authority (DAA) under a five-year contract with the General Authority of Civil Aviation (Gaca). A joint venture of Turkey’s TAV and local Al-Arrab Contracting won the $430m contract to build the terminal, which has a capacity to handle up to 12 million passengers annually, in 2012.

All airports in Saudi Arabia have been organised under a holding entity called Saudi Civil Aviation Holding Company. An airport company has been formed for the kingdom’s key airports including the Riyadh Airports Company, which operates King Khalid International.

A minority stake in Riyadh Airports Company will be offered to private investors via an equity sale. US-based Goldman Sachs was hired earlier this year to advise on the sale.