Increased support for private sector urged

RIYADH: The business sector in the Kingdom has called for increased support for the private sector so as to allow companies and institutions to continue to thrive in the market.
Contractors and government service providers said the private sector is an important and reliable partner in the implementation of many initiatives, but a delay in the disbursement of dues will have a negative impact on the companies and their employees.
Sources said the chairman of one of the chambers of commerce in the Kingdom submitted four proposals to solve the problems of contractors, which include establishing a schedule with information on all dues to contractors, clearing the dues on set dates, easing restrictions and collateral demanded by banks for government projects.
Such restrictions increase financial pressure on contractors, said a source, requesting that SAMA reconsider these requirements.
It has been also proposed to exempt contractors from late fees impacted by lack of payment of dues in a timely manner, as well as planning future projects over the longer term in order to ease costs of production, manpower and equipment. This would also reduce project costs overall, according to the proposal.
The business sector said all contracts for the government sector face severe financial pressures due to late payments. “Contractors have fulfilled their contracts and provided the system as required, but are still waiting for payment,” they said, adding that such companies have suffered from late payment of wages for six months or more as complaints accumulate at labor offices and courts.
“Such proposals will help everyone better manage spending and responsibilities, while reducing pressure on courts and legal bodies as well by limiting the numerous complaints associated with late payment of dues,” said a source.
Osama Al-Afaliq, chairman of the Saudi Contractors Commission, said the organization has started communicating with some partners from the ministries to propose strategic ideas and listen to their viewpoints.
He said talks are under way with the Finance Ministry and other relevant authorities regarding the problems facing the sector, namely those related to financial entitlements for government projects, and the absence of a special system for bankruptcy.
Al-Afaliq said the talks have been fruitful so far, thanks to the guidance of Finance Minister Ibrahim Al-Assaf and his four deputy ministers in listening and identifying all needs to better create sustainable solutions.