Saudi Arabia pays SR40 billion owed to contractors

Saudi Arabia pays SR40 billion owed to contractors
With money flow resuming, work on stalled projects is likely to start again.
Updated 21 November 2016

Saudi Arabia pays SR40 billion owed to contractors

Saudi Arabia pays SR40 billion owed to contractors

RIYADH: Saudi Arabia has made a payment of SR40 billion it owed to private companies, in less than two weeks after Deputy Crown Prince Mohammed bin Salman, chairman of the Council for Economic and Development Affairs, announced a settlement of dues to the contractors.

The payment was late due to a sharp decline in oil revenue and the new measures taken by the Kingdom to reduce spending on several projects.

“The Saudi government is expected to pay up to 80 percent of the total dues to contractors during the remaining few weeks of this year by disbursing another SR100 billion,” said Fahad Al-Hammadi, chief of the National Contractors’ Committee at the Council of Saudi Chambers, here Saturday.

The funds released by the Kingdom will help the companies to pay what is owed to foreign workers, and will create cash flow in the market.
Speaking to Arab News, Al-Hammadi confirmed that the contracting companies have received SR40 billion, which represents 25 percent of their dues from different government agencies.

He said that “more than 80 percent of the backlogged payments will be released within the next few days or weeks.”

Giving more details of the payment and predicting a growth in the contracting sector, he said that most of the projects, which were suspended earlier, will be revived and implemented in order of priority.

He said that the construction sector is the key driving sector of the Saudi economy, which prompts and creates demand for building materials, cement, and transport, besides creating job opportunities.

Referring to the efforts that will boost the construction and contracting sector, Al-Hammadi said that “a new positive phase for the construction and building sector has come following a package of measures taken by the Council for Economic and Development Affairs at its meeting on Nov. 7 under the leadership of Prince Mohammed bin Salman.”

The council has discussed the mechanism on how to pay the contractors with the highest degree of transparency.

The council has also laid down “the necessary procedures in detail to pay the amounts owed to the private sector from the public treasury.”

Some of the contractors from Germany, Turkey, Spain and India, contacted by Arab News Saturday, confirmed that they are being paid their dues.