But Riyadh officials say the contractors “have been paid on time” as construction nears completion.
The American company Bechtel Corp. and other international companies are looking for billions of dollars in unpaid Saudi government bills for work on the Riyadh metro project, according to five people familiar with the matter.
Bechtel owes around $ 1 billion for the transportation system, a cornerstone of the government’s efforts to modernize the traffic-cluttered Saudi capital, four people said. Companies working on the project – which also involves companies from France, Spain and Italy – are looking for several billion dollars in unpaid bills in total, two of the people said, with Bechtel most owed.
The late payments are partly linked to construction delays and cost overruns caused by the coronavirus pandemic, which trapped some workers outside the kingdom and made it difficult to keep the pace of work on the project going, three said. people. The payments dispute took on diplomatic overtones last year when the U.S., French and Spanish embassies in Riyadh raised the issue in a letter to the Saudi government, two people said.
Government contractors have been complaining for years of overdue payments since falling oil prices in 2015 led authorities to withhold tens of billions of dollars to help contain a burgeoning budget deficit. While this decision helped to limit government spending, it undermined the confidence of a private sector that relies heavily on public procurement.
Officials say they are determined to pay on time and have taken significant steps to address the issue. But the collapse in crude prices last year appears to have caused similar delays for some companies, although the problem is less systemic than before.
Bechtel did not respond to a request for comment. The Royal Commission for the City of Riyadh, which is overseeing the project, said in a statement that payments to contractors “have been made in a timely manner” and that “the aforementioned claims are assessed in accordance with a dispute resolution process stipulated in the contract.”
Other companies involved in the project include Fomento de Construcciones & Contratas SA in Spain, WS Atkins Ltd. in the United Kingdom and Salini Impregilo SpA in Italy, renamed Webuild.
Riyadh’s metro is the key to Crown Prince Mohammed bin Salman’s plans to double the city’s size and transform it into an international business center. It is one of the largest such projects in the world, with six lines built by three consortia, and is about 90% complete, said two people familiar with the matter.