RIYADH Feb 21 Saudi Arabia has appointed
U.S.-based Bechtel Corp, one of the world's largest industrial
contractors, to run a new oversight office tasked with reducing
inefficiencies and trimming costs on state infrastructure
Bechtel will help the Saudi government set up and run its
new National Project Management Organization (NPMO), known in
Arabic as Mashroat, it said in a press release without
elaborating on the size of the contract.
The firm has worked on mega-projects in the Islamic kingdom
for some 70 years, including airports and the sprawling Jubail
and Ras al-Khair industrial cities. It is currently developing
two of six lines on the $20 billion Riyadh Metro project.
The Saudi cabinet created the NPMO office last year as part
of a broad government effort to overhaul the economy and close a
gaping budget deficit, as sustained low oil prices have taken a
toll on the kingdom's finances.
Projects throughout Saudi Arabia slowed to a halt last year
as the government delayed payments to contractors for their
work, in some cases for more than a year.
Officials told Reuters in late December that the government
had paid 100 billion riyals to the private sector over the
previous two months, and pledged to pay future debts within 60
days of receiving the invoice.
At least $13.3 billion of government projects are at risk of
being cancelled in Saudi Arabia this year because of fiscal
pressures and shifting government priorities, according to a
study by consultants Faithful+Gould.
The total value of project awards for 2017 is forecast at
$27 billion, and could rise to $32 billion if the Mecca Metro
project, which was originally expected to be awarded in 2016,
goes through this year.
(Reporting by Katie Paul; Editing by Mark Potter)