Once powerful Saudi Binladin Group sacks thousands

Sunday 08/05/2016
Muslim pilgrims walk outside the Grand Mosque in the holy city of Mecca, Saudi Arabia. The SBG was entrusted with construction work in the mosque.

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.