Saudi businessman and Chairman of the powerful Council of Saudi Chambers of Commerce (CSC), Dr. Abdulrahman al-Zamil, has written a letter to Saudi Arabia’s King Salman requesting that he intervene to ensure that the government makes delayed payments to construction companies.
Some construction firms have seen scheduled payments from the government delayed by over six months, according to the letter obtained by Reuters. “If the delay in payments continues, these companies will be at risk of default, or go completely out of business.”
As Reuters reports, direct appeals to the King are not uncommon in Saudi Arabia, but the letter “underlined the pressures facing the Saudi construction sector, which has run into difficulties since the second half of last year as the government has reduced spending in response to low oil prices.”
The finance ministry has cut advance payments to firms doing state construction work from 20% to 5%, the government has awarded fewer contracts, and its payments to companies for work already done have slowed, industry executives tell Reuters. “Partly because of the payment delays, some firms have delayed paying their staff or laid off thousands of workers, and several have begun talks to reschedule debts. Jabal Omar Development said last month it was in talks with creditors after failing to make a 650-million Saudi riyal first repayment on a 3-billion Saudi riyal government loan,” Reuters reports.
Dr. Al-Zamil serves not only as the CSC chairman, but also is the chairman and CEO of National Chemical Carriers Ltd. Co., the Chairman of the Board of Directors at Zamil Group Family Board. He also serves as the Chairman of the Board of the Saudi Export Development Center, the Central Asia Investment Company, the National Energy Company and the National Chemicals Transport Company.
At the recently-held U.S.-Saudi CEO Summit at the Council of Saudi Chambers last month, Dr. Al-Zamil and his American counterpart, Tom Donohue of the U.S. Chamber of Commerce hosted a dialogue about expanding business and commercial opportunities between U.S. and Saudi companies. Agenda topics included discussion of developing a knowledge-based economy (healthcare focus); supply chain development; steps to enhance the Saudi business environment and; workforce productivity. The session included the input of the Saudi Ambassador to the United States Prince Abdullah bin Faisal bin Turki al-Saud, and Amb. Joseph Westphal.
That meeting was also attended by over 40 top private-sector Saudi and American executives including major construction interests in Saudi Arabia such as Khaled El-Seif, Chairman of the El-Seif group of companies, and representatives from the Saudi Electricity Company, Zahid Tractor, Olayan Group, Alturki Group, and others.
