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Saudi pays delayed $10.7bn to private sector

The amount represents 25% of the money owed to private construction firms, with remaining payments expected to be made within "the next few days or weeks"

The $10.7bn paid to private sector construction firms represents 25% of the money they are owed, reports suggest. [Representational image]
The $10.7bn paid to private sector construction firms represents 25% of the money they are owed, reports suggest. [Representational image]

Saudi Arabia's government has reportedly made payments worth $10.7bn (SAR40bn) that it has owed to private sector companies, according to a construction executive quoted by Arab News.

Payment delays have led to a cash crunch in the kingdom after oil prices dropped below $50 bpd this year. 

Construction companies have received $10.7bn (SAR40bn) in the last two weeks, amounting to 25% of the money owed to them "by various government agencies", Fahad al-Hammadi, chief of the National Contractors' Committee at the Council of Saudi Chambers said, according to Arabian Business, citing Arab News.

He added: "The Saudi government is expected to pay up to 80% of the total dues to contractors during the remaining few weeks of this year by disbursing another $26.6bn (SAR100bn). 

"More than 80% of the back-logged payments will be released within the next few days or weeks." 

Select construction projects that were cancelled due to low oil prices "will eventually be revived and implemented in order of priority", Hammadi added, according to the report.

Earlier this month, a committee headed by Saudi Arabia's Deputy Crown Prince Mohammed bin Salman bin Abdulaziz confirmed it will complete all private company payments delayed due to declining oil revenues "by December 2016".

The Deputy Crown Prince also acts as the chairman of the Economic and Development Affairs Council, which made the announcement following a meeting held on 7 November.

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Nov 09, 2019