Saudi Arabia reportedly set to pay billions to settle dispute over Riyadh Metro


Bloomberg report claims that two out of three consortia have reached an agreement for the disputed payments

Saudi Arabia is set to pay billions of dollars to settle a dispute with contractors over the Riyadh Metro, it has been revealed, bringing the long-delayed project one step closer to completion.

Citing sources familiar with the matter, a Bloomberg report said that two out of three consortia, which include Bechtel Group and Alstom, have already reached an agreement for the disputed payments. Furthermore, the report added that the third group, which includes Italy’s Webuild, is expected to sign a deal soon.

Contractors working on the project have been pursuing billions of dollars in payments in total, with Bechtel alone asking for approximately $1 billion. However, the report added that the terms of the settlement are unclear.

An agreement to resolve the dispute would be a significant milestone for the Kingdom as it would allow work to resume on the mobility megaproject, which has been touted as a solution to the capital’s traffic congestion woes.

Furthermore, moving to resolve the dispute would help ease concerns about the Kingdom’s attitude towards contractor payments, the report added.

Tens of billions of dollars owned to construction firms and suppliers were withheld during and after the 2015 oil slump in a bid to rein in a ballooning budget deficit. However, with the price of crude rebounding this year, the country is set to record its first budget surplus in nearly a decade.

Representatives for Bechtel and Alstom have not immediately responded to requests for comment, Bloomberg said. It added that the Royal Commission for Riyadh City, which oversees the project, also didn’t respond.

Riyadh Metro was originally scheduled to begin light operations in 2019, with full operations set for 2021. The project consists of six metro lines, 85 stations and will span a total distance of 176km. Construction work began in Q2, 2014 and the project is expected to serve some 3.6m passengers per day once it is fully operational.



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