The Saudi finance ministry has resumed payments to Saudi Binladin Group (SBG), the kingdom’s biggest construction firm, for its work on government projects, according to a Reuters report which cited a local newspaper. The positive news for SBG and its employees comes at a critical time for the company.
SBG faced its toughest challenges in the construction giant’s 85 years of operation as tightened government spending and a nearly year-long restriction on new projects in the pipeline greatly undermined the company’s finances. That caused SBG to lay off 77,000 people, or about one-third of its total workforce.
The resulting cash squeeze left it struggling under an estimated $30 billion in debt owed to local and international lenders, “an amount large enough to cause potential stress for the Saudi banking system,” Reuters reports.
SBG received the prohibition on new state contracts after one of its cranes at the Mecca’s Grand Mosque fell during a storm on September 11 2015, killing 111 people. and injuring 394. Top SBG executives were prohibited from leaving the country in an accident that was said to trouble and anger King Salman, who later toured the Mosque project.
“The crash embarrassed the king, since he is the Custodian of the Two Holy Mosques in Mecca and Medina and responsible for ensuring they are safe,” writes Bruce Riedel in Brookings, calling Binladen the “scapegoat” for the accident. That ban has now been lifted.