Once powerful Saudi Binladin Group sacks thousands
London - The Saudi Binladin Group (SBG), a once-powerful global construction conglomerate, has sacked 77,000 of its foreign work force, leading to protests by former employees and the torching of seven of the company’s buses in Mecca.
Such protests are rare in the kingdom, where demonstrations are generally not tolerated by authorities.
A Saudi daily newspaper reported that SBG fired tens of thousands of foreign employees. The company also handed them exit visas. However, workers refused to leave the kingdom since they are owed as much as four months back pay.
The firm will shed almost half of its overall work force, including a large number of Saudi nationals. According to local reports, SBG has given approximately 17,000 Saudi staff members the option of resigning or waiting for back pay, plus a two-month compensation package.
“The size of our work force is always appropriate to the nature and size of projects and the time frame they are to be carried out by the group,” said Yaseen Alattas, a Saudi Binladin Group spokesman.
Alattas said most of the jobs eliminated were “on specified-term contracts”, adding that the group would continue to implement its obligations towards everyone, including employees terminated.
SBG is estimated to owe $660 million in unpaid wages.
The company belongs to the family of the late al-Qaeda leader Osama bin Laden. The family disowned the terrorist leader in 1994 and his Saudi citizenship was revoked.
The deteriorating situation has prompted Saudi Labour Minister Mufrej al-Haqbani to stress that workers for the embattled firm will get their wages. “I think, God willing, it will be solved and the company promised to solve all issues related to wages,” he said on CNBC.
“Workers have three choices: Stay and agree to stay and help company. His second choice is to transfer his contract to another employer and third to exit the country and assign someone to follow his rights at that company. So the rights of employees, you know, are protected,” he added.
SBG has become victim to accidents and the shrinking local construction market, particularly in previously lucrative government projects.
The Saudi government’s once preferred builder, SBG saw its fortunes change during the 2015 haj, when 107 people were killed and hundreds more injured after an unsecured crane belonging to the firm crashed in Mecca’s Grand Mosque. The tragedy, which sparked an outcry locally and abroad, resulted in an investigation by authorities, which found that SBG “was in part responsible” for the accident.
This led to the government suspending all new contracts associated with the firm. Existing contracts were put under review. This caused a steep drop in the firm’s stock value on the Tadawul stock exchange.
Industry insiders also say that SBG is allegedly $30 billion in debt, which, when factored with the current state of the kingdom’s economy, is likely to amplify the company’s woes.
With falling oil prices forcing the government to curb spending, fewer new jobs were commissioned and a number of construction firms were faced with delayed payments, forcing the head of the Saudi Chamber of Commerce Abdulrahman al-Zamil to write a letter to King Salman bin Abdulaziz Al Saud asking him to intervene.
“If the delay in payments continues, these companies will be at risk of default, or go completely out of business,” the letter stated.
Deputy Crown Prince Mohammed bin Salman bin Abdulaziz, who is spearheading the kingdom’s economic diversification drive, told Bloomberg News that all cancelled government projects were not under contractual agreements and were cancelled to avert an economic catastrophe. He said a number of construction companies had been paid and that the rest was on the way.
SBG has worked on numerous high-profile projects within the kingdom, including the Grand Mosque in Mecca, the holiest site in Islam; the huge Al-Faisaliah tower in Riyadh; and King Abdulaziz International Airport in Jeddah. Before the crane accident in Mecca, the firm was tapped for the lucrative causeway project between Egypt and Saudi Arabia.