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Tuesday, May 03, 2016

77,000 sacked by Saudi Binladin Group

Friday, 19 August 2016 Saudi building bust may demolish prince’s reforms Trapped 17 August 2016 By Andy Critchlow A man looks at central Riyadh from the Faisaliah Tower - Saudi Arabia, December 14, 2003. - RTXMCCI Spare a thought for the Indian construction labourers abandoned without pay in Saudi Arabia. Thousands have become victims of a slump in oil prices which has left some building contractors on the brink of bankruptcy and others chasing delayed payments. Their plight could add to the complicated task of reforming a country that is too dependent on cheap imported labour and dismissing of its draconian employment laws. A deal reached on Aug. 3 for the government to help some Indian workers who have been laid-off to either return home, or claim unpaid wages, during the current downturn is likely to prove only temporary. The “kafala” system – which leaves workers dependent on their employment sponsor for permission to enter or leave the country – will continue to trap migrants who hand over their passports in return for sponsorship to work. Kafala isn’t just a human rights problem. The plight of stranded workers also undermines Deputy Crown Prince Mohammed bin Salman’s published vision of a modern economy that’s no longer dependent on oil – the price of which is around half where it was two years ago – and can attract foreign investors without fear of adverse publicity. More layoffs in construction are likely. Saudi is home to almost one-third of the real estate and infrastructure projects currently ongoing in North Africa and the Middle East, according to Eikon data. The International Monetary Fund expects sluggish growth of 1.2 percent this year, almost a third of the rate of expansion in 2015. Abdullah Abdul Mohsin al-Khodari – one of the few listed building companies in the kingdom – reported an 84 percent drop in new contracts in the second quarter compared with a year earlier. There are a few ways Saudi could stop the problem worsening. One is to bail-out the stricken builders and pay-off outstanding wages – though that sets a bad precedent. Another is to let the price of oil rise by trimming production, and indirectly buoy up the economy. It could even scrap the kafala system, and make the kingdom more attractive for foreign investors. None are simple, but over time, the answer might be all three. A man looks at central Riyadh from the Faisaliah Tower - Saudi Arabia, December 14, 2003. - RTXMCCI A man looks at central Riyadh from the Faisaliah Tower - Saudi Arabia, December 14, 2003. - RTXMCCI Related Links Breakingviews is not responsible for the content of external internet sites. Reuters: India says Saudis to assist thousands of stranded workers Reuters: Saudi market regulator jails two executives of contractor MMG Link to Saudi Gazette story: Saudi Oger expected to declare bankruptcy Subjects Construction Dubai EMEA Gulf Middle East Money & Markets Real Estate Saudi Arabia Related Articles Saudi's three great pillars are showing cracks Context News Thousands of Indian manual workers have been left in a state of limbo in Saudi Arabia after a slump in the oil-rich country’s construction sector. India’s junior foreign minister Vijay Kumar Singh visited the kingdom on Aug. 3 to meet Saudi officials to ensure that stranded foreign construction workers would be repatriated and paid their outstanding wages. Construction companies in the kingdom are suffering from a downturn in the Saudi economy caused by lower oil prices. Saudi Oger - a construction company owned by the Lebanese Hariri family - is reported to be close to bankruptcy and has struggled to pay thousands of employees, the Saudi Gazette reported on Aug. 8. A sharp slowdown in construction work comes as the kingdom’s Deputy Crown Prince Mohammed bin Salman implements a plan known as Saudi Vision 2030 to encourage foreign investment and diversify the region’s largest economy away from oil exports. Most Popular Young-old financial gap calls for mature debate SEC left red-faced over $35 bln pink-sheet debacle Post-Brexit UK consumers are oddly rational Tencent is sturdiest rock inside China’s firewall Mongolia’s hangover needs more than IMF medicine Breakingviews on Twitter Privacy Policy Terms and Conditions © Thomson Reuters 2016. All rights reserved. ========================== Saudi King Salman orders protection of workers' rights King Salman issued orders to end the suffering of the workers in a decisive and quick way after seeing that the company failed to address these issues. Saudi Gazette, Jeddah Tuesday, 9 August 2016 Text size A A A Saudi Arabia’s King Salman issued a series of directives with the intention of resolving all cases of unpaid salaries and avoid repetition of such incidents in the Kingdom’s labor market in future, Minister of Labor and Social Development Mofrej Al-Haqbani announced on Monday. Accordingly, special teams have been constituted to closely monitor the firms to check whether they are fulfilling their contractual obligations and to intervene in case of violations, the Saudi Press Agency reported. Saudi Oger contracting company has been the subject of complaints by thousands of its workers for not paying salaries to them for the past nine months. Al-Haqbani said the recent labor issue is not a common phenomenon but a special case with a contracting company because of its violation of contractual obligations. The ministry will take penal action against the company in line with the Labor Law. King Salman’s directive obliges companies to pay salaries to their workers through the Wage Protection Program. Under the system, companies will not be paid for their work by the government until the Ministry of Labor and Social Development confirms that workers’ salaries have been paid on time. The minister emphasized that the Saudi Labor Law and its executive bylaw protects the rights of all workers in the private sector and the Labor Law is keen on having balanced relations between employers and employees with strict adherence to contractual obligations by both the parties in addition to protecting their wages through legislations. “Under the program, all companies have to transfer salaries to bank accounts of their workers and the ministry will strictly follow these transfers every month and take penal action against firms violating the law. The ministry allows workers, who did not receive salary for more than three months, to transfer their sponsorship to another employer without the permission of the current employer and can sue the employer at labor courts for their dues.” “Official inspection team from the ministry found that Saudi Oger Ltd. violated its contractual obligations with workers with regard to salary and accommodation. Serious lapses were found in serving food, providing health services to workers, and maintaining and cleaning accommodation. The King issued orders to end the suffering of the workers in a decisive and quick way after seeing that the company failed to address these issues. Accordingly, the ministry has taken the following measures. The workers are allowed to renew their iqamas (residency permits), and get final exit visa at the state’s expense, and the company will be liable to meet this cost in due course. Saudi Arabia allows workers, who did not receive salary for more than three months, to transfer their sponsorship to another employer without the permission of the current employer. (Reuters) The maintenance and cleaning of their accommodation have been done. The ministry also ensured continuous supply of food and drinking water to the workers and followed up on the efficiency of provision of this service. Free medical services have been made available at their camps. The ministry also entered into contracts with legal firms to offer free legal service to the workers. The ministry will guarantee rights of those workers who decided to leave on final exit. It entrusted Saudi Arabian Airlines to arrange free transportation for such workers and the payment will be levied from the company in due course. The ministry also coordinated with the concerned embassies in identifying those who want to transfer their sponsorship and those who want leave the Kingdom on final exit. Al-Haqbani also said that the ministry launched electronic service called “Mustasharik Al-Omali” to offer free consultancy service to both employers and employees on labor related problems. The ministry, in cooperation with the Saudi Telecom, introduced the scheme to distribute free SIM cards to new workers upon their arrival at airports to contact the ministry if required. The ministry also started contact center with services in eight languages so as to enable workers to lodge grievances. This article first appeared in the Saudi Gazette on Aug. 9, 2016. Last Update: Tuesday, 9 August 2016 KSA 10:19 - GMT 07:19 ======================================= S Arabia OKs vast economic reform plan Mon Apr 25, 2016 12:16PM Home / Others / Business Saudi Arabia has approved a plan for a major economic reform that would cut the kingdom’s reliance on oil by 2030. Saudi Arabia has approved a plan for a major economic reform that would cut the kingdom’s reliance on oil by 2030. Saudi Arabia announced on Monday that it had approved an ambitious economic plan which is meant to turn the economy around from reliance on oil to being investment-driven within the next decade and a half. The approval of the plan – dubbed "Saudi Vision 2030" – was publicized by Saudi King Salman in a televised announcement. The plan – which appears to be the brainchild of the king's son, Deputy Crown Prince Mohammed bin Salman – is expected to set in motion what could be a period of significant economic change in the oil-rich kingdom. It basically focuses on privatizations, further reductions in subsidies, and selling the shares of the state-owned oil company Saudi Aramco and the creation of a giant $2 trillion Sovereign Wealth Fund. "We plan to sell less than five percent of Aramco. Aramco's size is very big. It is estimated at between $2 trillion and $2.5 trillion," said Prince Salman who is second in line to the throne and serves as the country's defense minister. "We plan to set up a $2 trillion sovereign wealth fund... part of its assets will come from the sale of a small part of Aramco," he told the Saudi-owned Al-Arabiya news channel. The prince further emphasized that another way to drive up non-oil revenue is by investing more in mineral mining and boosting the kingdom's own military production capacity. To the same effect, he said a plan is on agenda to set up a holding company for military industries that would be fully owned by the government at first and listed later on the Saudi bourse. "We are now about to establish a holding company for the military industries 100 percent owned by the government that will be listed later in the Saudi market," Prince Mohammed told Al-Arabiya TV. "We expect it to be launched by end of 2017 with more details." Saudi Arabia was the world's third largest arms buyer last year, with purchases of more than $87 billion last year. The prince also said the kingdom, which annually welcomes millions of Muslim pilgrims to the holy cities of Mecca and Medina, would become more welcoming to other types of tourists — in line with Saudi Arabia's values. A new residency visa program could generate additional revenue and would allow Muslims and Arabs to live for extended periods in the country, he said. ======================== 77,000 sacked by Saudi Binladin Group Mon May 2, 2016 3:21PM Home / Others / Business The construction giant Saudi Binladin Group which was at the heart of a deadly crane accident in Mecca last September has reportedly fired 77,000 of its workers. The construction giant Saudi Binladin Group which was at the heart of a deadly crane accident in Mecca last September has reportedly fired 77,000 of its workers. Reports emerged on Monday that the Saudi Binladin Group, one of the kingdom’s most powerful firms, has sacked 77,000 foreign workers. The revelation was made by Al-Watan newspaper which said Binladin, that has built some of the kingdom’s landmarks, is also facing accusations that it is failing to pay salaries to its staff. AFP has quoted an unnamed official working with the firm that “some staff have been let go” without providing an exact number. Another official has also been quoted as saying that the move was in line with a drop in the number of Biladin projects. "The size of our workforce is always appropriate to the nature and size of projects and the timeframe they are to be carried out by the group," Yaseen Alattas, a Saudi Binladin Group spokesman, told AFP. He said workforce changes would be normal "especially when some projects have ended or are about to end". Most of the jobs eliminated "are on specified term contracts" for particular projects, Alattas said The report by Al-Watan said the sacked employees were among 200,000 expatriates – mostly believed to be Egyptians - employed by the company. It added that 12,000 out of the 17,000 Saudis working for the firm as engineers, administrators and inspectors were also expected to be let go. The AFP said it had realized in March that delayed receipts from the government, whose oil revenues collapsed over the past two years, have left employees of the kingdom's construction giants struggling to survive while they await their salaries. However, Binladin Group was also sanctioned by the government after a deadly crane accident in Mecca last September, it added. On Friday, Al-Watan reported that 50,000 of the group's staff were refusing to leave the country while their salaries remained unpaid after more than four months, AFP said. An Arab News report on Monday blamed "unpaid workers" for torching several Binladin Group buses in Mecca over the weekend. The Group developed landmarks including the domed Faisaliah Tower in central Riyadh and the Mecca Royal Clock Tower, one of the world's tallest buildings. After decades of thriving on lucrative government contracts, the company faced unprecedented scrutiny after one of its cranes working on a major expansion of the Grand Mosque in Mecca, Islam's holiest site, toppled in September. At least 109 people including foreign pilgrims died, leading King Salman to suspend the firm from new public contracts. This has been a factor in the firm's economic difficulties, a well-informed source has told AFP. ============================= Tue May 10, 2016 | 8:36 AM EDT Saudi Aramco finalizes IPO options and plans global expansion Oil tanks seen at the Saudi Aramco headquarters during a media tour at Damam city in this file photo dated November 11, 2007. REUTERS/ Ali Jarekji/File Photo Oil tanks seen at the Saudi Aramco headquarters during a media tour at Damam city in this file photo dated November 11, 2007. Reuters/ Ali Jarekji/File Photo Saudi Aramco finalizes IPO options and plans globa...X By Rania El Gamal DHAHRAN, Saudi Arabia (Reuters) - Saudi Arabia's state-owned oil giant is finalizing options for its partial privatisation and will present them to its Supreme Council soon, its chief executive said about the centerpiece of the kingdom's efforts to overhaul its economy. The company has a huge team working on the proposals for the initial public offering (IPO) of less than 5 percent of the company's value, which include a single domestic listing and a dual listing with a foreign market, CEO Amin Nasser said on Tuesday. They will be presented "soon" to Aramco's Supreme Council, headed by Deputy Crown Prince Mohammed bin Salman, who is leading an economic reform drive to address falling oil revenue and sharp fiscal deficits by boosting the private sector, ending government waste and diversifying the economy. Nasser also said Aramco was seeking to expand globally via joint ventures in Asia and North America. "We are looking at the current market status that, even though challenging, is an excellent opportunity for growth," Nasser said, adding that he was looking at opportunities in the United States, India, Indonesia, Vietnam and China. The CEO was speaking to reporters during a rare media visit to the company's extensive, well-guarded Dhahran headquarters, located near where American oilmen first struck the Arabian Peninsula's enormous crude reserves at Well Number 7 in 1938. Besides proposing to sell a stake in the company, which would require it to release sensitive reserves data, Riyadh has asked Aramco to play a big role in developing industrial projects aimed at stimulating non-oil economic sectors. Last month, Prince Mohammed said he expected the IPO would value Aramco at at least $2 trillion, but that he thought the figure might end up being higher. Any valuation would account for both oil price expectations and the size of Saudi Arabia's proven oil reserves. Company officials said Saudi Arabia had discovered a total of 805.6 billion barrels of oil, of which 141.5 billion had already been produced and 260 billion barrels were considered "proven", the industry term for reserves that can definitely be extracted. Aramco also had 403 billion barrels of reserves it could probably extract, they said, adding that it hoped to add another 100 billion barrels to total reserves by 2025 by increasing the recovery rate by 50-70 percent using new technology. GROWING DEMAND ADVERTISEMENT Aramco expects global crude oil demand to grow by 1.2 million barrels per day this year, he said, and has seen increasing demand in the United States and India. "We will meet the call on Saudi Aramco," Nasser said, adding that the company will increase capacity in future if needed, but that for the time being its maximum sustainable capacity would stay at 12 million bpd, with total capacity of 12.5 million bpd. Saudi Arabia produced an average of 10.2 million bpd of crude in 2015, he said, adding there had been a big drop in oil output among non-conventional and even other conventional producers. The expansion of the Khurais oilfield will come on stream in 2018, he said, adding that the latest stage of its expansion project at the southeastern Shaybah oil field would be finished "in a couple of weeks". The increased capacity of 250,000 bpd, taking Shaybah's total production capacity to 1 million bpd, is aimed at rebalancing Saudi Arabia's crude oil quality and at compensating for falling output at other fields as they mature. The immense Saudi Aramco complex in Dhahran resembles a small city, with its large residential complex, its own hospital, sports stadium and parks. Inside a sleek control room, technicians monitored huge screens that showed via digital graphics the core elements of the business, from the progress of oil tankers across the oceans to the available crude grades and refining facilities. At Aramco's research center nearby, officials showed reporters "the cave", a colorful virtual representation on wraparound screens of drilling operations under the Shaybah oil field. INDUSTRIALIZATION Aramco's continued investment in downstream industry is seen as a crucial element of economic diversification plans. One example of this is its plans to sign an agreement soon with Saudi Basic Industries Corp (Sabic), the state-run petrochemical and metals conglomerate, to jointly develop an oil-to-chemicals project, an official said in a briefing to reporters. Related Coverage Saudi Aramco says to sign chemicals project MOU with SABIC Saudi Aramco says its oil output trending slightly upwards Saudi Aramco says in final stages of preparing IPO options The project, likely to cost up to $30 billion, would chime with efforts to better integrate the kingdom's energy and industrial sectors. On Saturday a new Energy, Industry and Mineral Resources Ministry was created in place of the old oil ministry. Another example is its huge ship repair and shipbuilding complex that it is developing at Ras al-Khair on the kingdom's east coast to be fully operational by 2021, Nasser said. The first part of the shipbuilding complex will be ready by 2018, and it will eventually make oil rigs and tankers, Nasser said. A presentation by the company said the complex would create 80,000 jobs and allow Saudi Arabia to reduce its imports by $12 billion, while increasing the country's gross domestic product by $17 billion. (Reporting by Rania El Gamal; Writing by Andrew Torchia and Angus McDowall; Editing by David Stamp and Pravin Char)

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