Scores of social infrastructure projects have been launched in the GCC in recent years, many in the wake of the 2011 Arab uprisings as governments sought to avoid the unrest that spread across the region. The poor quality of education and the lack of healthcare services available were among the major points of discontent voiced by protesters during the upheaval.

Despite the GCC states enjoying vast oil wealth, their education and healthcare sectors remain underdeveloped and have failed to keep pace with rapid population growth.

In the healthcare sphere, rising incomes and sedentary lifestyles have increased the prevalence of obesity, diabetes and other chronic diseases, creating demand for specialised medical services. 

Another factor driving demand for healthcare provision is a rise in the region’s elderly population, with the number of people aged 65 and above expected to surge from 1.2 million in 2015 to 14.2 million by 2050, according to a report by the UAE’s Alpen Capital.

Healthcare spending

Spending on healthcare projects in the region jumped to $9.8bn in 2013, compared with just $843m in 2009, according to regional projects tracker MEED Projects. At present, some $25bn-worth of healthcare schemes are under way in the GCC, while a further $19.2bn are at the design and build stage.

Saudi Arabia is leading the way, with $13.1bn-worth of healthcare projects currently under execution. A further $5.8bn-worth of schemes are at the design and bidding stage in the kingdom, the largest of which is King Abdullah Medical City.

Located 28 kilometres from Mecca and 56km from Jeddah, the development will include hospital buildings, research centres, and a residential community, with a total built-up area of nearly 1 million square metres. In January, the local Al-Rashid Trading & Contracting Company submitted a bid of $1.7bn for the city’s main construction contract, which was 3.1 per cent lower than the second-lowest price submitted by Saudi Binladin Group.

Contractors have also submitted bids for the deal to build the estimated $1.2bn King Khaled Medical City in Dammam, which will cover a total area of 700,000 sq m and will include a 1,500-bed hospital.

Kuwait is also spending heavily on healthcare, with plans to increase hospital capacity by 50 per cent, from 2.2 beds for each 1,000 residents to 3.3 by 2016. This will entail adding some 6,400 beds to existing capacity of more than 4,700 beds, with expected expenditure of more than $3bn. The country’s 15 public hospitals account for 90 per cent of available beds and the rest is owned by about seven private healthcare providers. 

One of the biggest projects under way by the Health Ministry is a plan to expand nine hospitals across Kuwait. Many of the construction contracts have already been awarded, while a few are still at the bidding stage. In 2012, the ministry awarded the local Alghanim International a $112m deal for the construction of a 240-bed expansion to the Al-Razi hospital. In May 2013, a joint venture led by the local Associated Construction Company signed a $343m contract with the ministry to expand the Al-Amiri hospital, which will add 460 beds to the existing facility.

The following month, a joint venture of Metallurgical Corporation of China and the local Al-Tawbad General Trading & Contracting Company submitted a low bid of $184m for a deal to expand the Infectious Diseases Hospital in the Al-Asimah governorate.

Kuwait progress

In November 2013, India’s Shapoorji Pallonji, along with the local Al-Sager General Trading & Contracting Company, submitted the low bid for a contract to build an annex to Al-Sabah hospital. In March 2014, the ministry awarded a $941m deal to the local Sayed Hamid Behbehani & Sons to build a 955-bed annex to Farwaniya Hospital.

The ministry is currently reviewing bids for contracts to build extensions to the Al-Adan and Al-Jahra hospitals. A tender issued in 2012 for the expansion of the Kuwait Cancer Control Centre has yet to be awarded, while a tender to expand the Ibn Sina hospital is expected to be issued soon.

Elsewhere in the GCC, Oman boosted its healthcare budget in 2014 to RO1.3bn ($3.4bn), as demand has risen for more hospitals in the sultanate. Its population is growing by 2.5 per cent, or 54,000 people, every year, while hospital outpatient visits increased from 9.9 million in 2000 to 12.5 million in 2010.

The largest project currently in the tendering phase is a scheme to build the 700-bed Sultan Qaboos Hospital in Salalah. Oman’s Health Ministry is currently reviewing bids from 19 companies for the construction contract. India’s STUP Consultants is the project manager.

Abu Dhabi development

Another large healthcare project currently at the bidding stage in the region is the 838-bed Sheikh Khalifa Medical City in Abu Dhabi. The local/Australian Habtoor Leighton Group submitted the low bid of about AED3.9bn ($1.1bn) for the scheme in March. The second-lowest bidder, with a price of about AED4.9bn, is a consortium of Athens-based Consolidated Contractors Company, Beijing-based China State Construction & Engineering Corporation and Italy’s Techint Engineering & Construction. The other two bidders are Bam of the Netherlands, with a price of about AED4.9bn, and a joint venture of South Korea’s Samsung C&T and the local Al-Faraa General Contracting Company, with an offer of about AED5.1bn.

The project owner is Abu Dhabi General Services Company (Musanada), which took over responsibility for government construction schemes in the emirate last year. In December, Musanada awarded a $1.2bn deal to a consortium of the local Arabtec Construction and Spain’s Constructora San Jose to build the new Al-Ain hospital. The 719-bed hospital will include facilities for general medicine and surgery, a dedicated children’s ward, maternity and intensive care units, medical rehabilitation facilities, and VIP and royal suites.

In Qatar, the Public Works Authority (Ashghal) invited companies in May to prequalify for a contract to provide construction management consultancy services for a new medical city to be built near Qatar University. The facility will include a 1,100-bed trauma mass casualty hospital.

Education is also a key area of focus in the GCC as governments grapple with high unemployment rates among locals and a reliance on foreign labour. In many cases, the authorities’ efforts to encourage locals to work in the private sector are being hampered by a disconnect between the skills of nationals and the needs of private companies.

To help address this problem, governments are spending billions of dollars to build and expand schools to raise the productivity of locals and increase their ability to access high-paying private sector jobs. At present, there are $12.1bn-worth of education projects in the execution phase across the GCC, while a total of $6.9bn-worth of schemes are at the design and bidding stage.

Saudi Arabia is by far the biggest spender on education in the region, with about a quarter of the government’s overall budget of $66bn in 2014 earmarked for education and training, including the construction of 465 schools and the refurbishment of 1,500 others.

In 2013, 33 contracts worth a total of $1bn were awarded by the Education Ministry for projects across the kingdom, and altogether there is a total of $4.9bn-worth of education schemes under way. Looking ahead, 103 projects worth a total of $3.8bn are in the design or tendering phase, most of which are expansions of existing universities.

Kuwait is the second-most active market for education projects, with $2.7bn-worth of schemes under way. The largest project currently in development is a multibillion-dollar scheme at Kuwait University. The new Sabah al-Salem campus is being developed to gather all the university’s faculties, which are spread across the capital, on to one site.

The campus will be co-educational and able to accommodate up to 30,000 students. It will have more than 25 faculty buildings, as well as a 600-bed hospital for the medical faculty. More than $2bn-worth of contracts are currently under execution as part of the project, including the construction of the College of Science and the College of Art & Education.

The largest education contract currently at the bidding stage in Kuwait covers the construction of the Colleges of Social Sciences, Law and Islamic Studies at the new campus. The work also includes associated buildings such as a food court, prayer hall, libraries and a car park. In January, Shapoorji Pallonji submitted a low bid of $530m for the deal.

Qatar expansions

Elsewhere in the GCC, Qatar University is planning to spend $823m over the next few years on a major expansion that will include new student housing and colleges, Abdulla Yaqoub al-Sayed, chief operations officer of the university’s buildings operations department, told MEED’s Qatar Projects 2014 conference in Doha in March.

The university is gearing up for a major increase in its student population, which is expected to grow from 4,500 at present to 20,000 by 2019. New housing consisting of about 20 buildings is currently being constructed to better accommodate students, and is expected to be completed by September.

Qatar’s Interior Ministry has also launched a plan to build a police college at the police training institute. The local Consulting Engineering Group is the consultant on the estimated $412m scheme.

Meanwhile, US-based Hill International submitted a low bid in May for a contract to provide consultancy services for the construction of Oman University. In addition to a new university, which will be built alongside the Science & Technology City on a 12-square-kilometre site near Barka, the scheme will feature a science park, a convention centre, student activity centres, a student sports complex, a community centre and a market complex.