DUBAI- The Saudi cabinet announced on Tuesday it plans to reimburse contractors on government projects agreed before December 2016 for increased expat fees, according to a statement by Saudi Press Agency.

The cabinet said the finance ministry plans to reimburse contractors who entered into agreements with the government before December 2016, when the kingdom announced plans to increase fees paid by the companies for expatriate employees.

The labour-intensive construction sector has been hit hard by low oil prices, delays in government payments and a rise in expatriate workers fees.

(Reporting By Marwa Rashad Writing by Noah Browning Editing by Larry Kign) ((noah.browning@thomsonreuters.com;))