Saudi Binladin's cash flow crisis starts to ease
The cash flow crisis that has engulfed Saudi Arabia’s biggest builder, Saudi Binladin Group, has started to ease with much-needed payments from the kingdom’s finance ministry filtering through.
The Wall Street Journal had reported that payments of between US$800 million (Dh2.9 billion) to $1.1bn had been made to the company in September.
A spokesman confirmed to The National that payments had been made, but did not disclose the amount.
The spokesman said that the ministry “had begun releasing some of the due payments to the group in relation to currently executed projects owned by numerous government entities”.
He said that the move would strengthen the group and its “commitment to successfully complete all undertaken projects, as we have done since our inception”.
“We remain focused to continue our contributions to the development of Saudi Arabia and determined to overcome all odds, though temporary.”
The spokesman added that it is working with clients on delayed projects so that “any changes to the originally set schedules are jointly worked out”.
However, its delivery of future work will be curtailed by the fact that it has had to lay off so many staff during the course of the year as a result of its constrained finances.
The company said that about 80,000 workers had been released as part of its restructuring, but said that all of them have been paid all of the salaries and other service benefits they were owed.
The plight of workers for many of Saudi Arabia’s construction workers has come into sharp focus over the past few months as payment delays have got longer and longer, forcing a number of foreign governments to take action to ensure their own nationals were provided for.
India’s government began shipping food into the kingdom in August to feed workers from Saudi Oger who had reportedly gone for seven months without pay, while last month the Philippines government’s Overseas Workers Welfare Administration began distributing payments both to families of workers stranded in Saudi Arabia and those who had been repatriated without pay.
The OWWA’s payments were distributed to those who had been working for nine struggling Saudi contractors, including Saudi Binladin, Saudi Oger and Mohammed Al Mojil Group.
A report from Reuters last month stated that Saudi Oger, a company controlled by Lebanon’s Hariri family, is owed about 30bn Saudi riyals from the government for work it has undertaken, although it in turn owes 15bn riyals to its banks and several billions more to workers and suppliers.
Saudi Oger did not respond to requests for comment.
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