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Contractors blame lack of liquidity for project delays

The committee was planning to submit the results of a study to the authorities and would recommend that a contractors' committee be created

Published: Updated:

The head of the contractors committee at the Council of Saudi Chambers has said a number of government projects were delayed because the Ministry of Finance did not provide enough liquidity for their completion, according to Alsharq newspaper.

Fahd Al-Hammadi said the committee was planning to submit the results of a study to the authorities and would recommend that a contractors' committee be created.

He expected the first half of 2014 to witness a shortage of workers to complete projects and asked the period of government contracts be extended.

He pointed out that the number of projects in the year 2013 budget increased twofold over the previous year and the private sector participation reached nearly 60 percent.

“The construction sector will grow by 8 percent as there are 2,330 new projects in the budget, with a total cost of SR157 billion.”

Fawwaz Al-Khodari, a committee member, said the challenges that faced contractors in 2013 would continue into 2014. He added that all Council of Ministers directives should be enacted, one of which states that visas should be issued to contractors in a speedy manner.

“Nearly 90 percent of the projects are delayed due to reasons that could have been fixed. Some the reasons are the unavailability of plans and the lack of a consultant, in addition to last-minute changes in the projects,” he said while adding that Saudization in the construction sector stood at 5 percent but is expected to increase to 8 percent.

“This has caused an increase in contractors’ costs by 13 percent, where minimum salaries for Saudis were set at SR3,000 and the cost of work permits was increased to SR2,400 a worker,” he added.