Saudi Arabia has made a payment of SR40 billion it owed to private companies, in less than two weeks after Council for Economic and Development Affairs Chairman Deputy Crown Prince Mohammed bin Salman announced a settlement of dues to the contractors to enable them to clear dues of their employees. Hundreds of workers from Pakistan and other countries have been protesting over non-payment of their dues by the companies.
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 per cent 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.
The funds released by the Kingdom would help the companies to pay what was owed to foreign workers, and would create cash flow in the market.
Speaking to Arab News, Al-Hammadi confirmed that the contracting companies have received SR40 billion, which represented 25 per cent of their dues from different government agencies. He said that “more than 80 per cent 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, would be revived and implemented in order of priority.
He said that the construction sector was the key driving sector of the Saudi economy, which prompts and creates demand for building materials, cement, and transport, besides creating job opportunities.