Arab governments owe more than $2.5 billion in outstanding fees to local contractors and this has created a severe liquidity problem for the companies, Saudi Arabic language daily Al-Riyadh reported on Sunday.
Fahd Al-Hammadi, chairman of the Cairo-based Federation of Arab Contractors, told the newspaper that more than 53 percent of Arab contracting firms are suffering from cash shortages because of governments' failure to pay on time.
"…the problem could exacerbate due to the downturn in construction activity and the decline in public spending on infrastructure projects in the region," he said.
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