RIYADH — All government contractors get paid on time when they complete the required procedure for their payments, Saudi Finance Minister Ibrahim Al-Assaf told Al Arabiya Saturday.
“I challenge anyone to prove that a complete request for funds to the finance ministry has not been appropriated within a week,” he said.
Some government departments in Saudi Arabia blame the finance ministry for unfinished government projects due to delays in appropriating funds for contractors. Contractors who work on projects for the government have previously complained that they do not receive their payments on time, which results in delays in finishing these projects.
Al-Assaf blamed the contractors for underestimating what it takes to handle government projects.
“Some contractors bid for projects bigger than their capability which results in delays,” the minister said, adding that the issue is constantly under review.
“There are instructions by King Abdullah to expedite projects,” he said. “When we get appropriation requests at the (Finance) Ministry, we allocate funds for them on the same week.”
Demand across the real estate, infrastructure and utilities segments of the construction market in the Kingdom is constantly driven by the country’s rapidly growing and fast urbanizing young population.
Last year, the Saudi construction industry saw construction contract awards in an amount of $80.15 billion, and this figure is expected to reach $82,541 million in 2012 and $86,098 by 2013.
Heavy government spending, coupled with loose monetary policy, will keep domestic consumption and fixed investment growing healthily through the year. The Kingdom’s real GDP growth is forecast to come in at 4.6 percent in 2012, before slowing somewhat to 4.1 percent in 2013, BMI said in its Saudi real estate industry forecast for Q3 2012.
Saudi Arabia will be taking the lead in regional infrastructure and construction spending over the next 15 years as it looks to address its housing shortage and provide jobs for its people, according to a new report by BoFa Merrill Lynch.
“The Saudi construction and infrastructure sub-sectors remain strong, growing 177 percent over the same period, and currently accounting for 46 percent of the 2012-2013 MENA project pipeline totaling $448 billion,” said Mutashar Murshed, Merrill Lynch Kingdom of Saudi Arabia CEO. —SG