Saudi Arabia reportedly owes subway builders billions of dollars | Construction News

However Riyadh authority says contractors ‘have been paid in a well timed method’ as development nears completion.

U.S.-based Bechtel Corp. and different worldwide companies are pursuing billions of {dollars} in unpaid payments from Saudi Arabia’s authorities for work performed on the Riyadh metro venture, in response to 5 individuals conversant in the matter.

Bechtel is owed round $1 billion for the transport system, a cornerstone of the federal government’s efforts to improve the traffic-clogged Saudi capital, in response to 4 of the individuals. Firms engaged on the venture — which additionally includes French, Spanish and Italian companies — are pursuing a number of billions of {dollars} in unpaid payments in complete, two of the individuals mentioned, with Bechtel owed probably the most.

The overdue funds are associated partly to development delays and value overruns attributable to the coronavirus pandemic, which trapped some employees exterior the dominion and made it troublesome to proceed the tempo of labor on the venture, three of the individuals mentioned. The funds dispute took on diplomatic overtones final yr when the American, French and Spanish embassies in Riyadh raised the matter in a letter to the Saudi authorities, two of the individuals mentioned.

Authorities contractors have complained for years about overdue funds since a 2015 oil worth droop led authorities to withhold tens of billions of {dollars} to assist rein in a ballooning finances deficit. Whereas that call helped to maintain a lid on state spending, it dented the boldness of a personal sector that depends closely on authorities contracts.

Officers say they’re dedicated to paying on time and have taken important steps to resolve the issue. However the crash in crude costs final yr seems to have led to comparable delays for some corporations, although the issue is much less systemic than earlier than.

Bechtel didn’t reply to a request for remark. The Royal Fee for Riyadh Metropolis, which oversees the venture, mentioned in a press release that funds to contractors “have been made in a well timed method” and “the aforementioned claims are being assessed as per a dispute decision course of stipulated throughout the contract.”

Different corporations concerned within the venture embrace Spain’s Fomento de Construcciones & Contratas SA, the U.Okay.’s WS Atkins Ltd. and Italy’s Salini Impregilo SpA, which has been rebranded as Webuild.

The Riyadh metro is vital to Crown Prince Mohammed bin Salman’s plans to double the scale of town and switch it into a global enterprise hub. It’s among the many largest initiatives of its kind on this planet, with six strains being constructed by three consortia, and is about 90% full, two individuals conversant in the matter mentioned.