RIYADH, 10 December — A road contractors’ group in the Kingdom plans to sue Saudi Aramco for damages caused by its failure to supply asphalt in sufficient quantities.
The road contractors depend solely on Aramco for supplies for their work in the governmental and private sectors.
Since the company has a monopoly in asphalt production in the Kingdom and therefore is the only agency responsible for meeting demand in the local market, the contractors said.
Because of the present shortage, the contractors will not be able to complete the work they have undertaken within the specified period. This failure will force them to pay huge sums in fines to the parties with whom they have signed contracts.
Aramco has already expressed its readiness to increase daily production of asphalt to 11,000 tons at a refinery in the Central Province, according to Ibarhim Al-Akkas, director general of the contractors section at the Riyadh Chamber of Commerce and Industry, and Muhammad Al-Haqbani, chief of the local-sales division at the Aramco in the Central Province.
The company has undertaken several other measures to meet the increasing demand, Al-Haqbani added. Operation of the Ras Tanura Refinery has been increased to 16 hours a day, including on Thursdays and Fridays, according to Al-Akkas.
The contractors became more alarmed when the roads committee of the RCCI in November warned about the continuation of the shortage despite the combined production of four Aramco units in Riyadh, Ras Tanura, Jeddah and Yanbu.
Representatives of large contracting companies and transport agencies discussed last Tuesday the option of initiating legal action against Aramco "for not making serious efforts to avoid a catastrophe in the contracting market".
Contractor Suleiman Muhammad Suleiman said the contracting companies are currently implementing the contracts signed in 1999. "Any shortage of the material will hamper their work. The delay in the completion of the work will make them liable to pay heavy fines to their clients," he said.
The projects undertaken by the Communications Ministry have to be completed within five months, he added.
The meeting decided to demand compensation from the supplier of the material because the contractors will have to pay huge fines to their clients on the one hand while, on the other, their own workers will have to be paid despite the fact that they are sitting idle. The rent for heavy equipment will also have to be paid.
Contractors fear that the price of asphalt will rise sharply because of the shortage of supply. This will lead to further losses, because contracts were agreed when prices were lower.
Akkas said Aramco was ready to supply fully the approved quantities of asphalt and meet their needs after coordinating with the Ministry of Communications and municipality offices in different regions.
Meanwhile, the roads committee at RCCI decided to ask Aramco to instruct the customs department not to allow export of asphalt materials without its permission.
