A joint venture of local firms Al-Arrab Contracting Company and Rabia Contracting have submitted the lowest bid of SR2.1bn ($560m) for a housing project at King Abdulaziz University in Jeddah.

The project covers the construction of 42 buildings, each with six storeys and a basement level. It also includes the construction of a further 1,260 housing units. In total, the buildings will cover 500,000 square metres.

Al-Arrab’s bid came in lower than prices from two other local firms. Al-Muhaidib Contracting Company submitted a bid of SR2.7bn, and Abdullah Al-Khodari Sons Company submitted a bid of SR2.8bn.

The project had been expected to cost close to SR3bn. King Abdulaziz University is the client.

It is the latest example of the emphasis the government is placing on education. In the 2009 budget, which was announced in late December 2008, SR122bn was allocated for spending on education and manpower development.

Money has been allocated to build 1,500 schools and rehabilitate 2,000 existing educational facilities. Riyadh’s commitment to education projects has led to a series of tenders being issued by institutions across the country.

Tenders issued include one for 100 faculty housing units for King Fahd University of Petroleum & Minerals in Dhahran, in the Eastern Province, which has a deadline of 7 February.

Bids are due to be submitted by 14 February for the second phase of King Khaled University at Abha in the southwest.

The SR5bn contract covers the construction of an 800-bed hospital and 12 further buildings, including five medical schools.

The Higher Education Ministry has also issued two tenders for faculty housing at the University of Hail in the north of the kingdom and Taiba University in Medina in the west, with bid deadlines of 15 and 16 February respectively.

The tender for Taiba University is expected to cover 400 housing units and a further three apartment buildings.

“Since King Abdullah [bin Abdulaziz al-Saud] announced the new [education] allocation in the budget, there has been a flurry of tenders from the universities,” one local contractor bidding for the contract at King Khaled University tells MEED. “They are all looking to capitalise on the new funds that have been made available.”

In January, three contracts valued at a total of more than SR30bn were awarded by the Finance Ministry for a new university in Riyadh, Princess Noura bint Abdulrahman University for Women (MEED 30:1:09).

Saudi Arabia has projected a budget deficit of SR65bn in 2009, because of higher spending and lower oil revenues.

The Finance Ministry says spending is projected to rise by 16 per cent to SR475bn this year, despite a dramatic fall in projected government revenues to SR410bn from SR1.1 trillion in 2008.