The government of the Kingdom of Saudi Arabia has paid private companies, Saudi contractors, their dues, amounting to SR40 billion. This has happened in a short period, of less than 2 weeks, following the announcement by Deputy Crown Prince Mohammed bin Salman, who is the chairperson of the Council for Economic and Development Affairs.
The delay in the payments is attributed to the drop in the oil revenue. As a result the Kingdom has taken drastic measures to curb expenditure on numerous projects.
Fahad Al-Hammadi, the chief of the National Contractors’ Committee at the Council of Saudi Chambers said that the Saudi government will settle at least 80% of the amounts owed to contractors in the coming weeks. This will be achieved by paying an additional SR100 billion by the end of the year.
The payment of the contractors’ dues by the government will boost the cash flow in the kingdom and the foreign workers will also get their due from contractors. Al-Hammadi validated that the companies have already been paid SR40 billion, which accounts for 25% of the total dues. He added that over 80% of the delayed payments will be disbursed in the next few weeks.
Al-Hammadi also confirmed that the majority of the projects that had been put on hold, will resume. He predicted that there will be substantial growth in the contracting sector, with the projects being executed based on priory levels.
He emphasized the importance of the construction sector in driving the economy of the Saudi Kingdom. This sector creates employment opportunities and demands for transport and building materials
Mr. Al-Hammadi attributed these efforts in the construction sector to the measures that have been put in place by the Council for Economic and Development affairs, led by Prince Mohammed bin Salman. There will be a new wave in the construction sector, included in the deliberation of the council.
It was revealed that it is a major priority for the council to ensure that all the systems are in place to pay contractors and ensure there is total transparency. Procedures have also been put in place so as to facilitate the payment of private contractors, through the public treasury.
Arab News contacted some contractors from Turkey, India, Spain and Germany to confirm these claims. Most contractors said they have started receiving their payments.