The Bahrain government has finalised a $1 billion deal to build 3,100 social homes in the country’s largest ever public-private residential partnership.
An agreement has been struck between property developer Diyar and the Ministry of Housing of the Government of Bahrain (MoH).
Under the deal, the MoH has committed to buy the social housing units, affordable housing units and supporting infrastructure from Diyar at a projected cost of around $1 billion once the scheme is built, essentially removing the risk for the developer. The scheme has been in planning for several years but until now has been unable to go ahead.
The project is intended to address the acute shortage of low-cost homes in Bahrain. It is considered extremely significant for Bahrain as it represents the single largest contract in size and value for the development of government housing and affordable private housing units.
According to Charles Russell Speechlys law firm, which advised on the deal, there are around 50,000 people on social housing waiting lists in Bahrain alone and demand is increasing with population growth.
The GCC as a whole has struggled to keep up with demand for middle and lower class housing, with countries such as Qatar and Saudi Arabia instigating schemes to provide new affordable homes. Dubai, meanwhile, will need to build 100,000 units of affordable housing to meet demand by 2020, the lawyers said.
The Diyar-MoH development is also the first of its kind to include provisions relating to Bahrain’s new Social Housing Finance initiative, which aims to provide financial support to Bahraini citizens to acquire housing units through a subsidised programme in partnership with financial institutions across the country.
The scheme will be procured on a phased basis and as a new version of the public-private-partnership (PPP) model that has been used for other low-cost housing projects in Bahrain.
Minister of housing Basim Al Hamer said: “This is a very important agreement as it is the largest agreement of its type for cooperation between the private and public sectors and will have far reaching positive consequences for all citizens in the kingdom.”For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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