Saudi contractors seek extension of government contracts

Contractors in Saudi Arabia have asked the government to extend contracts it as awarded them to avert fresh project delays following the departure of hundreds of thousands of expatriate construction workers in 2013 under a seven-month official amnesty, the head of the contractors has said.

The national contractors commission (NCC) in the largest Arab economy has also proposed the creation of a pan-Saudi authority grouping key contractors to resolve chronic problems associated with faltering of some government projects, NCC’s chairman Fahd Al Hammadi told the Arabic language daily Al Riyadh.

He said nearly 80 per cent of the major contracting firms in the Gulf Kingdom are expected to release balance sheets showing losses in 2013.

“We do not have precise figures for stalled projects but we know there are stalled government projects. For this reason, we will send a proposal to the Monarch for the establishment of a contactors’ authority to tackle our problems,” he said.

“The reasons for the project delays include a delay by the finance ministry in providing sufficient liquidity to the projects which are awarded to the contractors.

“Another key obstacle now facing the contractors is the labour shortage in the first six months of 2014. That is why we are asking the government to extend its contracts awarded to the contractors so we can tackle this problem.”

Hammadi said those problems need to be resolved because of an expected large increase in projects in 2014, noting that budget allocations for new projects in 2014 totaled nearly SR248 billion (Dh245 billion) compared with SR157 billion (Dh155 billion) worth of 2,330 contracts awarded in 2013.

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