Saudi Arabia’s Ministry of Finance has denied allegations that the delay in contractors’ payments is due to financial representatives from various ministries stalling on payments.
An official from the National Committee for Contractors at the Saudi Council of Chambers of Commerce had claimed various ministries were to be blamed for the delays in payments owed to contractors.
Fahd Al-Nasban, a member of the contracting committee at the Saudi Council of Chambers, responded to the allegations and said that it was in fact the Committee who was proving to be a stumbling block for government projects as it was not disbursing payments. However, he conceded that both sides bore blame for the impasse, stating:
“Ministries and government institutions bear about 70% of the blame for the delay while the Ministry of Finance bears the remaining 30%,” he said in a report by Arab News.
He pointed out that the Ministry of Finance was responsible for establishing mechanisms for disbursements and monitoring payments processes, in accordance with the schedules agreed.
He added that a decision issued by the Council of Ministers stipulated that contractors in the employment and maintenance sectors should be paid on the fifth of every month.
“But, I can vouch that payments to several contractors in these two sectors are delayed by more than six months,” Al-Nasban said, adding that both parties should work together to arrive at speedy resolution of the dispute.
Since its government’s enforcement of stronger labour laws and a crackdown on illegal immigrants, the Saudi construction market has suffered a delay in up to 90% of its projects due to labour losses and delayed contractor payments.