The Saudi Binladin Group will be allowed to bid for government contracts again after Riyadh lifted the ban it imposed on Jeddah-based construction company.

The ban was lifted by royal decree according to a spokesman for the contractor that was speaking to Reuters.

The ban was imposed in last year following a crane collapse in September at its Grand Mosque project in Mecca that killed 107 people. MEED reported on 1 February that Riyadh had concluded investigations into accident. 

Without the opportunity to win new work the contractor has been forced to downsize its operations and lay off some 77,000 staff and workers. Some workers have protested about non-payment of wages and torched company buses.

The government has insisted that the labour issues will be resolved. On 3 May, Saudi Arabia’s Labour Minister Muferrej al-Haqbani said the labour crisis at the local Saudi Binladin Group (SBG) will be resolved.

On 2 May, SBG said it had paid the affected employees.

Saudi government contracts have traditionally been SBG’s main source of revenue.

To replace the lost turnover the company has been forced to look for work from the private sector and overseas markets.

For the private sector, the company is understood the be planning to form its own real estate company to develop its land bank and create work opportunities for its contracting business.

For overseas work, the company has secure significant orders in Qatar in joint venture with local developer Qatari Diar. The company has also been competing for work in Bahrain and was understood to have bid aggressively for the contract to build the expansion of Bahrain International airport.

Saudi Binladin Group’s labour strife demands attention

 Saudi Binladin protests

Saudi Binladin protests

Labour strikes in Kuwait, protests demonstrations in Saudi Arabia and now the most violent of the episodes – burning down of company assets by frustrated workers in Mecca. The labour issue is becoming a problem in the Gulf region, especially in Saudi Arabia.

The social backlash on the back of lower oil prices and a slowdown in economy, which has pretty much brought the construction sector in the kingdom to a standstill, was expected. But if it goes to violent and unprecedented extremes it could well be something that the authorities have not anticipated.

Workers of Saudi Binladin Group (SBG) set on fire several company buses in Mecca, just a day after the company laid off almost half of its workforce. Read more.