As Saudi Arabia's economic problems worsen, thousands of construction workers are complaining about unpaid wages.

Among those affected are 38,000 employees of Saudi Oger – the kingdom's second-largest construction firm – who have not been paid for four months. Saudi Oger is chaired by Saad Hariri, the Lebanese politician.

Three weeks ago, more than 1,000 angry employees of the Binladin construction giant demonstrated outside the company's headquarters in protest against a six-month delay in paying their wages. 

The governments of the Philippines, France and Bangladesh have also been making diplomatic representations on behalf of citizens working in the kingdom who have not been paid.

Failure to pay on time is not a new problem in the Gulf states and the Saudi authorities have been trying to clamp down on offenders during the last few years. In theory, employers can be fined SR3,000 ($800) for every delayed salary.

However, there is little doubt that the current problems are mainly a result of the Saudi government's financial difficulties. Reuters explains:

The Saudi [government] spending clampdown since oil prices dropped has made the situation much worse. The finance ministry has cut advance payments to firms doing state building work, the government has awarded fewer contracts, and its payments to companies for work already done have slowed.

In absolute terms, the state does not lack money to pay its debts; it still has nearly $600 billion in overseas assets. But austerity controls imposed on government departments have slowed approvals for payments and their disbursement.

The government has not disclosed a figure for the amount of money it owes the companies, but industry executives estimated privately that it could total hundreds of millions of dollars; one executive suggested at least several billion dollars.

Some executives said they had been informed by authorities that the government intended to pay its debts by the end of this month. Others were skeptical, however, saying such undertakings had been made and broken repeatedly in recent months.

Yesterday, the Saudi Gazette reported:

Several Saudi Oger employees filed a complaint to the Labour Ministry accusing the company of delaying their salaries for more than four months and said they were unable to honour their commitment to commercial banks for the loans they took to build houses or buy cars and could not sustain their families.
They said the company justified the pay delay by saying that the government has not paid it for a number of projects it has executed.

According to the source, the company’s manager in the kingdom, Fareed Shakir, in an internal memo issued about 10 days ago, promised to pay a month’s salary to all employees a week from February 14 but has not honoured his promise.

The manager also promised to pay all the delayed salaries in instalments and to deposit the salaries in the employees’ bank accounts regularly from March but nothing has happened thus far.