Saudi contractors unpaid for months

Work has stalled on the King Abdullah Financial District in Saudi Arabia owing to the collapse in oil revenues.
Work has stalled on the King Abdullah Financial District in Saudi Arabia owing to the collapse in oil revenues.

Riyadh - Delayed receipts from a Saudi government whose oil revenues collapsed over the past two years have left employees of the company struggling to survive while they wait to be paid.



By AFP

Published: Sun 27 Mar 2016, 11:00 PM

Last updated: Mon 28 Mar 2016, 2:58 PM

 He's had no salary for six months, he cannot pay his children's school fees and his permit to reside in Saudi Arabia has expired. But Robert still holds out hope that things might improve for him and thousands of other workers at Saudi Oger, the once-mighty construction giant led by Lebanon's billionaire former prime minister Saad Hariri.
Delayed receipts from a Saudi government whose oil revenues collapsed over the past two years have left employees of the company struggling to survive while they wait to be paid.
Other contractors are also affected, but sources say problems at the 38-year-old Saudi Oger go deeper than the kingdom's current economic strains.
"Already when I worked at Saudi Oger, there were delays in salary payments to local employees," a former staffer told AFP. "It seems the situation got worse."
Saudi Oger employs around 50,000 people of various nationalities, from managers to labourers, and Robert said the salaries of nearly all have been delayed.
But at six months without a pay cheque, he is among the longest-suffering. "I don't have money," he said. "It's hard."
The veteran employee of Saudi Oger says he has "no choice" but to stay with the firm because he cannot find another job.
Robert, whose name has been changed because he asked for anonymity, said the company promised in a letter that salaries will flow at the end of March.
"It's a desperate situation," a well-informed source said, describing expatriate families facing a similar plight to Robert's. "They can't pay for the tickets" to even fly home, the source said, adding that many senior officers of Saudi Oger support families in Lebanon, meaning remittances to that country will be affected. He also noted the impact on Saudi Oger's lower-income workers.
The informed source said poor management "is one of the main problems" at Saudi Oger, but this has been compounded by the economic challenges of a kingdom confronting a projected budget deficit of $87 billion this year.
France's embassy, concerned for the many French employees at the company, sent two letters to the firm, which responded with its promise to start paying the salaries. "The thing is, do they have the funds to keep their promises?" the informed source asked.
He said the plight of the Hariri family company raises two questions: "Will Saudi local banks continue to finance Saudi Oger, and secondly, will the Hariri clan manage to enlist an investor willing to provide new investment?"
The company built some of the most grandiose complexes in Riyadh, including the Ritz-Carlton hotel. Among its ongoing projects, Saudi Oger's website lists a five-star hotel and office tower along with a monorail in the King Abdullah Financial District.
Cranes perch, unmoving, atop more than two dozen towers that were nearing completion at the northern Riyadh project.
Robert confirms the Financial District is among the stalled Saudi Oger projects but he adds that none have been cancelled.
In a business which is ultimately all tied to the government, construction projects have been "slowed down" and cash "is not coming in on time," the contractor said. 


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