KSA government owes contractors over $26bn - FIDIC

Engineering body says contractors can wait up to a year for payments

NEWS, Business, Contractor, Delays, FIDIC, Payment, Saudi Arabia

Delays in paying contractors on government contracts in Saudi Arabia means that firms are owed more than SR: 100bn ($26.7bn), according to the a representative of the International Federation of Consulting Engineers (FIDIC).

According to Arab News, the organisation's representative in the Kingdom, Nabil Abbas, said that the money outstanding represents around 30% of the total volume of government projects.

He said the delays in payments to firms was one of the main reasons why government projects are either delayed or put on hold.

He pointed out that although government agencies require contractors to implement work once deals have been signed and that delayed payments are not a valid reason for downing tools, international law obliges government agencies to pay contractors for work already completed within 30 days. In Saudi Arabia, contractors can wait for up to a year for payments in many cases.

He said that contractors, consultants and owners all have a role to play in making sure projects are implemented, but government bodies need to ensure they issue approvals for work that has been completed in a timely fashion.

"The most important is the control of government agencies, which provide instructions, follow-up, and monitor compliance by issuing approvals in a period not exceeding 10 days, as well as postponing services which obstruct the implementation of government projects."

 

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