Contractors in Kingdom blame it on Nitaqat for project delays

Updated 24 March 2015
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Contractors in Kingdom blame it on Nitaqat for project delays

Saudi contractors said they incurred losses amounting up to 95 percent in 2014.
The losses, according to a report in a local newspaper, came as a result of sudden decisions issued by some ministries.
Contractors demanded that equal terms be imposed on them as foreign investors in terms of flexible contracts.
“We hope that government agencies treat us on equal terms as foreign investors in the construction field, especially since foreigners get a lot of benefits,” said Fahad Al-Hamadi, head of the national committee for contractors at the Council of Saudi Chambers (CSC).
He urged the government to draft special regulations for the construction sector.
“The plan should explain the mechanism of how decisions are taken and grant the contractors a grace period of three years to implement the new decisions,” he said.
Commenting on the profit margins of construction companies in the Saudi market, Al-Hamadi said: “It stands between 5 and 10 percent. Such low profit margins directly affect the financial capabilities of the contractor and his reputation in the eyes of suppliers and banks.”
He said that contractors are linked with time-limited contracts and projects. “Any changes in regulations have negative impact on our work, causing us to incur losses. One such decision was to raise recruiting costs of foreign workers to SR2,400,” said Al-Hamadi.
He said the wage protection system causes confusion in the sector because contractors receive their money allocations every two to three months, and not on a regular basis at the end of each month. “The wage protection system obliges the contractor to pay monthly salaries to workers, so what can he do if the allocated entitlements were delayed for one reason or another?” he asked.
Al-Hamadi demanded that authorities make contracts flexible and changeable in line with other changes that might occur in the contracting sector.


Finance officials meet to map out Saudi Arabia’s budget plans

Updated 19 April 2019
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Finance officials meet to map out Saudi Arabia’s budget plans

  • Finance representatives of 150 government bodies meet for the Budget Forum 2020

RIYADH: Saudi finance chiefs have kicked off a major conference in the capital aimed at mapping out the Kingdom’s budget requirements.
Around 300 specialists representing 150 government bodies met at the InterContinental hotel in Riyadh for the Budget Forum 2020.
Minister of Finance Mohammed Al-Jadaan welcomed delegates to the second edition of the gathering organized by the Saudi Finance Ministry under the slogan “Partnership and Empowerment.”
Al-Jadaan said the ministry was focused on “partnership and commitment,” and sought to share the challenge of developing an effective budget to achieve the Kingdom’s ambitious goals.
“We are also committed to empowering financial leaderships to learn about the ministry’s programs and projects and provide training and qualification opportunities to the best international standards,” he added.
The finance chief said the budget planning process required the collaboration of multiple authorities and a clear strategy based on transparency. 
Items up for discussion at the forum included financial planning in governmental bodies, automation, and the promotion of revenues and efficient spending.
Finance Ministry steering committee chairman, Abdul Aziz bin Saleh Al-Freih, stressed the importance of the forum in getting the ball rolling at an early stage on formulating a general state budget.
Workshops were held on the sidelines of the conference focused on empowering government organizations, and a training program on financial planning and income estimations was also staged.