Saudi Oger awaits PwC project review findings

Govt commissioned review

DUBAI, April 4, (RTRS): Saudi Oger is still waiting for the outcome of a government-commissioned review into its billions of dollars of projects in the kingdom, which could help determine the struggling construction group’s future, banking sources say.

The findings — also keenly awaited by banks in the kingdom owed about 13 billion riyals ($3.47 billion) — were due to be shared with Saudi Oger before the end of January, according to the sources.

After dominating the Saudi construction market for years, Saudi Oger, owned by the family of Lebanese Prime Minister Saad al-Hariri, began to flounder as a result of cuts in government spending and payment delays.

The government appointed PricewaterhouseCoopers (PwC) to conduct the review focusing on Saudi Oger’s major projects in the kingdom and examining claims about how much it is owed by the government, said the sources, who are familiar with the matter.

The review is likely to determine how much the company will receive in outstanding payments, as well as whether it will continue working on the projects, they said.

PwC, the Ministry of Finance and Saudi Oger did not respond to requests for comment.

The company is not believed to have been a beneficiary of recent moves by the government to pay some of the debts it owed to private sector firms, said one of the sources.

One source estimated Oger was owed about 30 billion riyals by the government and that many of its building projects, which constitute the bulk of its business, have been inactive for the past six months or more as the company’s cashflow had run down. Maintenance projects are the exception, and the company has continued to work on these, the source said.

The company has been struggling to meet bank payments since its accounts were frozen by authorities after several lenders took legal action against it, the sources said.

Alawwal Bank and Banque Saudi Fransi had recently joined National Commercial Bank (NCB) and Samba Financial Group in seeking court orders demanding payment.

The sources were unsure which projects were included in the review but, according to Saudi Oger’s website, among the major schemes it is involved in are the King Abdulaziz Center for World Culture, the King Abdullah Financial District in Riyadh and the King Abdullah International Conference Center in Jeddah.

The sources said one outcome of the review could involve the government making sufficient payments to the company to allow it to continue working on the projects until completion, at which point Saudi Oger would be wound down.