Saudi Contractors Struggle With Payment Delays

Some government departments are taking months to process paperwork

- Vivian Nereim

Some contractors in Saudi Arabia are still struggling to get paid on time by the government despite assurances from officials that the long-running problem has been resolved, potentially threatening a nascent economic recovery in the kingdom.

While the Finance Ministry is honouring a pledge to pay the dues on time, many government departments are taking months to process the paperwork and send it to the ministry, according to four people with knowledge of the matter who asked not to be named because the issue is sensitive. In other cases, the delay is caused by a long backlog of payments that the government is gradually working through, two people said.

The delays are less severe than in the aftermath of the 2014 oil slump. Still, they’re affecting a swath of the economy from construction to education, and they’re particularly acute for companies dealing with the Health Ministry, three people said. Saudi businesses are already grappling with rising fuel and electricity prices, and new fees.