Saudi Arabia’s Health Ministry has awarded an estimated SR642m ($171.2m) contract to the local Al-Fouzan Trading & General Construction Company to build the first phase of the estimated SR4bn King Faisal Medical City, which will be located in the southern province of the kingdom.

Al-Fouzan will build the 500-bed first phase of the medical development, which is scheduled to take three years to complete.

The local contractor signed the construction deal with the Saudi Arabian Health Minister Abdullah Al-Rabeeah on 11 February.

The King Faisal Medical City will cover a total area of 262,836 square metres and will contain a specialised hospital, eye hospital and cardiac and neuroscience hospitals. The Medical City will have a total clinical capacity of 1,350 beds when completed and the scheme will also contain 200 housing units and 200 apartments for medical staff.

The Health Ministry has also awarded an estimated SR252m contract with the local Musad Al-Otaibi Contracting Company to build a 300-bed Maternity and Children’s hospital in Sakaka in Al-Jouf, located in northern Saudi Arabia.

The medical projects are part of the kingdom’s efforts to improve its provision of healthcare services for its rapidly growing population, which is expected to rise from the current 26.1 million to 29 million by 2015.

In the current budget, the government has set aside $23bn to be spent on health and social affairs for 2012, a 20 per cent increase over the 2011 allocation. According to the government’s budget report, there are currently 137 hospitals under construction in the kingdom.

The US’ Vanir Construction Management was recently selected to provide project management services for the estimated $1.2bn King Khaled Medical City project planned to be built in Dammam.