The local Saudi Binladin Group has submitted the low bid for the contract to build the first phase of a military medical city for the kingdom’s Defence Ministry on the outskirts of Riyadh.

The Defence Ministry received bids from 10 groups for the main construction contract for the 1,500-bed first phase of the medical facility. The initial phase will also include laboratories, warehouses and administrative buildings.

Binladin submitted a price of SR9.4bn ($2.5bn), which was 5 per cent lower than the SR9.9bn bid submitted by the second lowest bidder, a consortium of the local Nahdat al-Emaar Company for Contracting, the local Bin Dayel Contracting and Spain’s Sacyr.

A consortium of the local Saudi Oger, Italy’s Pizzarotti and the local Sapac submitted the third lowest price of SR11.8bn. The local Al-Mansoori Contracting company submitted the fourth bid of SR12.63bn, which was marginally lower than the SR12.67bn price entered by a joint venture of the local Al-Arrab Contracting and Spain’s OHL.

The other bidders and prices are:

• Al-Yamama (local)/Habtoor Leighton SR12.9bn
• El-Seif Engineering Contracting (local)/Larsen & Toubro (India)/San Jose (Spain) SR12.98bn
• Al-Bawani (local)/J&P (Cyprus) SR13.2bn
• Al-Rashid Contracting (local) SR13.6bn
• Al Fouzan Trading & General Construction Company (local) SR13.9bn

The hospital will contain 3,500 beds when completed. The medical city will be built on the Riyadh Airport highway, and will be located near Princess Noura University.

As one of several medical cities the Saudi government is planning, the project is part of an expansion of healthcare infrastructure to cope with rapid population growth.

The kingdom’s Health Ministry has invited contractors to submit prices to build the estimated $1.2bn King Khaled Medical City project in Dammam, with bids due on 18 August.

The King Khaled Medical City will cover a total area of 700,000 square metres and will include a 1,500-bed hospital, residential complex, research centre and an international academy. The client for the project is the local King Fahad Specialist Hospital group. The US-based team Aecom/Ellerbe Becket is the architect and lead designer for the medical scheme.

The US’ Vanir Construction Management was awarded the contract to provide project management services for the medical project in January 2012.