New mechanism set to compensate contractors, says official

The Saudi Contractors Authority (SCA) is working with the Council of Saudi Chambers and related bodies to set up a mechanism for compensating the firms that signed contracts with the government prior to December 23, 2016, Okaz newspaper reported, citing Osama Al Afaleq. SCA’s chairman.

The mechanism will also compensate the contractors that won bids on projects before that date.

The compensation will cover the delayed payments to contractors on monthly or quarterly basis, instead of the current mechanism which pays contractors after projects’ completion, he said.

Al Afaleq also said that the compensation will also reduce the impact of the combined bill, as firms have been affected by having to pay the expat workers’ fees in advance.

Paying for the workers’ licenses in advance disrupts the Saudization process and has a negative impact on several sectors, including contracting, he added.

According to data compiled by Argaam, the Saudi cabinet in March has decided to form a new committee to propose suitable mechanisms to compensate contractors that signed deals with the government prior to December 2016.

The committee included representatives from the ministries of commerce and labor who could seek the views of SCA and chambers’ council.

The expat workers fees were imposed as of January 2018.