Saudi builder Khodari puts value of delayed work at $96.6m
* Total value of delayed work: SAR362.2m
* Total value of backlog: SAR3.01bn
* Delays in payments, visa issuance
Saudi Arabian construction firm Abdullah Abdul Mohsin al-Khodari and Sons said on Tuesday that projects worth SAR362.2 million ($97m) had been delayed due to factors ranging from clients’ funding shortages to slow visa issuance.
The pace of construction in Saudi Arabia has cooled in the past two years as lower oil prices stall project funding and slow government payments, tightening banking liquidity and squeezing contractors.
Khodari, which last month reported a wider third-quarter net loss, said its total project backlog was SAR3.01 billion by September 30. That compared to SAR4.67bn at the same point of 2015. The firm, a builder of housing and infrastructure, said its total contract value was SAR7.78bn.
Delays built up when issuing visas, appointing consultants and making changes to designs, it said. Delays in the review and processing of invoices and work stoppages due to lack of money were also to blame.
Signs that the backlog of payments owed to contractors might be easing have emerged, with Arab News quoting Fahad al-Hammadi, chief of the National Contractors’ Committee at the Council of Saudi Chambers, as saying that by Sunday construction firms had received SAR40bn in the past two weeks, representing 25 per cent of money owed to them by various government agencies.
Fawwaz al-Khodari, chief executive of Khodari, told Al Arabiya television the same day that ten to 15 per cent of the SAR500m it was owed by the government had been paid. He expressed optimism that the company would receive 40 to 45 per cent of the total outstanding dues by the end of the year in the best-case scenario.