Saudi Arabian contractor Abdullah Abdul Mohsin al-Khodari and Sons stated on Monday it is going to guide a multi-million riyal loss after it acquired state permission to reallocate a authorities contract it gained in 2014 to a different firm.
Khodari, like many development-associated companies, has been pressured by a extreme slowdown within the sector brought on by cutbacks in state spending as a result of decrease oil costs.
It gained a SAR144 million ($38 million) contract to assemble a constructing within the western metropolis of Taif in March 2014. However Khodari stated in a bourse assertion on Monday it has now acquired authorities approval to cross the undertaking onto Moenes Mohamad Al Shayeb Civil Works Co.
Khodari stated the reassignment, which can end in a lack of SAR19.4m, was one among a number of measures it’s enterprise in response to labour market reforms and present weak spot within the development sector.
Since 2011, the federal government has elevated efforts to push extra Saudi residents into personal-sector jobs by making it costlier and troublesome for corporations to rent giant numbers of overseas staff.
In 2012, it launched a levy of SAR2,four hundred a yr for each foreigner an organization employs above the variety of its Saudi staff. For corporations akin to Khodari, which make use of appreciable numbers of low-paid blue-collar staff from Asia in jobs often shunned by native residents, the entire value could be substantial.
These labour modifications have had an “immense adverse impression” since 2011 on the “supply of tasks, liquidity, profitability, expertise retention, capability, improvement, progress”, the assertion stated.
Khodari stated its choice to move over the Taif contract was additionally in response to delayed funds, with the corporate looking for to scale back its publicity to authorities tasks in favour of labor that isn’t instantly state-associated. ($1 = SAR3.7500)
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Supply: Press Launch