A consortium of local contractors will begin negotiating with the Saudi Arabian government later this month to bid for construction of 500,000 homes there.

They embark on one of the biggest state-backed projects in the Middle Eastern nation, the Land Ministry said on Sunday.

A taskforce participated by Hyundai Engineering & Construction Co., SK Construction Co., Kyungnam Enterprise Ltd., and state-run property developer LH Corp. are making a detailed estimate of the project’s cost and size based on the scope provided by the Saudis, sources at the ministry said.

“The taskforce is brainstorming for the landscape design and other specifics based on the specifications and location proposed. The team will complete the site inspection and the drawings by March and attain the construction grade by March,” an official at the ministry said.

A successful proceeding of the final proposal will allow local contractors to grab a $66.7 billion project due for completion in 2014. The housing project is backed by the monarchs in Saudi Arabia for the country experiencing annual population growth of more than 3 percent for the past eight years.

President Lee Myung-bak and Land Minister Kwon Do-youp made a visit to Saudi King Abdullah bin Abdul Aziz on Feb. 9 where the two countries agreed to expand cooperation on health care, defense and the construction industry.

Construction orders from Saudi Arabia topped $100 billion last year for the first time since a Korean company clinched an order there in 1973.

By Cynthia J. Kim (cynthiak@heraldcorp.com)