Now Reading
Saudi government says 99% of private sector contractors paid within 60 days

Saudi government says 99% of private sector contractors paid within 60 days

The kingdom’s finance ministry says it remains committed to making payments on time

Saudi Arabia’s ministry of Finance has confirmed that the government remains “committed” to pay for all the contracts signed with the private sector within a period of 60 days, as previously announced.

It said that 99 per cent of the payment orders received by the ministry were paid within 60 days, with the remaining 1 per cent reserved due to judicial orders, the official Saudi Press Agency (SPA) reported.

The ministry acknowledged that there was a small percentage of the amount due that was disputed between the contractor or supplier and the government entity and hence the payment was not made in those cases.

These contracts are subject to the dispute settlement mechanism, with the contractor or supplier having the right to resort to a settlement to resolve the dispute.

Saudi Arabia’s finance ministry pledged in January 2017 that all private sector payments will be made within a 60-day time frame, following delays in payments in 2015 and 2016.

The ministry also launched an electronic platform to allow private sector contractors to check on the status of payments.

An official committee was also set up under a royal decree to determine government arrears and find a quick solution.

The kingdom has announced several major projects to diversify its economy in line with its Vision 2030 reform strategy and has taken several measures to reassure and build the confidence of international investors.

In November last year, the country launched the second phase of a private sector incentive plan with 17 initiatives totalling SAR72bn ($19.18bn).

The announcement comes as growth in the private sector remains relatively sluggish linked to higher fees, new taxes and Saudisation plans that have forced firms in some sectors to cut foreign workers.

Read: Saudi launches $19bn second phase of private sector incentive plan

© 2020 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top