Saudi govt said to settle delayed contractor payments

Saudi Arabia’s government will pay the SAR 180 billion it owes to the country’s contracting firms this year, as it aims to relieve pressure on the construction sector, Middle East Economic Digest (MEED) reported on Thursday, citing two unnamed sources with knowledge of the matter.

Payments will cover dues that had not been paid since last year, while there is still no clarity on when the remaining backlog of $10 billion will be cleared.

“Nothing has been released as yet, but everything is agreed on who will get how much,” the banker said. “Payments will be released gradually, starting March.”

According one of the sources, a payment plan has been communicated to major contractors, which will be paid in full.

Saudi Binladin Group (SBG), country’s leading contractor, was among those affected by the backlog in payments, as its business relies heavily on government spending. Nearly 2,000 SBG employees, including engineers, management staff and workers, had not been paid for four months. The delays led to protests in Makkah, local media reports revealed.

However, SBG recently reached an agreement with the Saudi labor ministry and police in Makkah to pay delayed wages to its employees.

The news also comes after a series of public spending cuts that were introduced by the government earlier this year, with the aim of shrinking the country’s budget deficit.