Saudi Arabia is yet to clear the outstanding to contractors although it made large disbursements to construction firms in 2016, according to an official of the contractors' body.

Osama Afaliq, chairman of the Saudi Contractors' Authority (SCA), said government debt to contractors has become a "major challenge facing the construction sector" in the kingdom.

"Several government departments still owe funds to the contractors...these arrears have not been paid and there are no government orders to pay them," Afaliq told the Saudi Arabic language daily Okaz on Tuesday.

He said SCA is in touch with those departments to tackle the problem by "activating" a royal order to pay all outstanding dues to the contractors.

Afaliq said SCA, which groups thousands of local construction companies, has developed an online platform for contractors to submit claims on the government.

Saudi Arabia owes billions of dollars to contractors because of its failure to pay them on time in recent years due to weak oil prices. Most of the funds are owed from government projects executed by the contractors in 2015.

In late 2016, the government paid contractors 40 billion Saudi riyals ($10.6 billion) and said more funds would be disbursed later.

(Writing by Nadim Kawach; Editing by Anoop Menon and Bhaskar Raj)

(anoop.menon@refinitiv.com)

#SaudiArabia #Construction #SaudiContractorsAuthority(SCA)

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