Riyadh-based Saudi Real Estate Company (Al-Akaria) has set up a contracting business called Saudi Real Estate Construction Company, according to a bourse statement on the Saudi Stock Exchange (Tadawul).

The company has been set up with SR100m ($26m) and will be 40 per cent owned by Turkey’s Kaya Homes.

The firm is a setting up a construction business at a time when Saudi contractors have been suffering over the past couple of years due to delayed payments from government ministries and a decline in oil prices that has slowed down contract awards in the projects market.

MEED recently reported that 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.