The submission of bids for the Interior Ministry’s $6bn medical cities projects in Riyadh and Jeddah show that Saudi Arabia is taking its health infrastructure programme seriously.

According to government statistics, 120 hospitals are currently under construction in the kingdom, and work on 12 more will start this year. With the population continuing to grow by more than 2.5 per cent a year, the government is aware of the need to expand its healthcare infrastructure and provision of services.

To meet the increasing demand, the kingdom has allocated SR68.7bn ($18bn) of its 2011 budget for the healthcare and social sector. With many expecting the price of oil to stay around $100 a barrel, the world’s largest oil producer will have no problem funding such an undertaking.

It is not just Saudi Arabia that will be investing heavily in improving its healthcare infrastructure. The Gulf currently has more than $15bn-worth of hospital projects in the pipeline and this is set to rise sharply over the next five years.

Kuwait is planning to spend $4.5bn on building nine new hospitals over the next five years, in addition to expanding nine existing hospitals. Last year, the UAE awarded a $1.3bn contract for the Cleveland Clinic in Abu Dhabi and recently awarded a $800m contract for work on Mafraq hospital.

Qatar and Oman are also both currently undertaking large-scale health projects to cope with the increasing demand.

With real demographic demand set to drive the medical schemes and ensure they go ahead, the Gulf’s healthcare sector is set to offer some exciting opportunities for the region’s contractors in the next decade.