Riyadh pays $10bn to contractors

21 November 2016

The government is likely to disburse another $26.6bn next month

Riyadh has paid contractors some government payments owed to private sector firms, according to several local reports that have quoted officials from Council of Economic and Development Affairs (CEDA).

The reports say that Riyadh has made payments of up to $10bn to contractors operating in the kingdom.

The government is likely to disburse another $26.6bn next month to pay up to 80 per cent of the total dues to contractors next month, reported Arab News, citing Fahad al-Hammadi, the chief executive of the National Contractors’ Committee at the Council of Saudi Chambers.

MEED recently reported that the plans were approved during a meeting of CEDA, chaired by Deputy Crown Prince Mohammed bin Salman al-Saud in Riyadh on 7 November.

Saudi Arabia also removed its finance minister, Ibrahim bin Abdulaziz al-Assaf, in a royal decree, replacing him with Mohammed bin Abdullah bin Abdulaziz al-Jadaan.

Payments to contractors working in Saudi Arabia have been increasingly delayed as the government has been forced to cut spending as the price of oil, the main source of revenue for the kingdom, slumped more than 50 per cent from a mid-2014 peak of $115 a barrel.

Contractors have subsequently cut tens of thousands of jobs and stopped paying wages, which created a labour market crisis and attracted criticism from foreign governments.

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