JEDDAH: According to experts the Saudi Binladin Group, the biggest company working in the construction sector of the country, has drifted back from the brink of economic crisis.
The group faced a severe blow last year after oil prices fell drastically, forcing the government to cancel or suspend a number of projects, postpone payments and stop new contracts after one of their cranes fell on the Grand Mosque of Makkah resulting in the death of 107 people.
The acute shortage of liquidity had forced the Binladin Group to stop work on a series of projects and relieve thousands of its employees and workers. Many of its foreign workers have not received their salaries and were only paid a stipend amount that meet their day-to-day needs. Some of these employees, in an act of protest, even went so far as to burn buses of the company.
The government has taken a firm approach toward this issue over the last three months by allowing the company to begin pushing for new biddings. The Arab National Bank and Saudi British Bank have given the company long-term loans amounting to SR2.5 billion which enabled it to pay the salaries of 10,000 of its workers, reimbursing its bond amount and restarting its activities within some of the suspended projects including King Abdulaziz Airport in Jeddah in June. The group has also hired around 30 finance and management experts to draw the plans for its financial recovery.
The spokesman of the group said that it has now compensated 70,000 of its foreign workers after ending their contracts (this was out of a total of 200,000 workers). Bankers say that reducing the number of workers is a positive step. However, the group is still facing pressure as it requested a loan of SR817 million last week and used it for financing construction work in the Grand Mosque.
Nonetheless, commentators have said that the company is moving forward on a promising path.
Binladin group coming out of financial crisis
Binladin group coming out of financial crisis
