Saudi Arabia allocates $3.1bn to help private sector with expat fees

Reimbursements of expat fees will be especially valuable to labor-intensive sectors such as construction, one expert said. (Shutterstock)
Updated 10 February 2019
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Saudi Arabia allocates $3.1bn to help private sector with expat fees

  • Companies that had a higher or equal number of Saudi employees versus expats will be eligible for the reimbursement or waiver of fees
  • The government has allocated 11.5 billion riyals ($3.1 billion) for reimbursements under the decision

RIYADH: Saudi Arabia has approved a scheme to reimburse some of the companies that struggled to pay steadily increasing fees for expatriate work permits in 2017 and 2018 and waive the fee hikes for some who weren’t able to pay, the labor minister said.
The government has allocated 11.5 billion riyals ($3.1 billion) for reimbursements under the decision.
“This initiative will support private sector companies, help them overcome the obstacles and achieve their goals and encourage them to expand employment of Saudi citizens,” Labour Minister Ahmed bin Suleiman Al-Rajhi tweeted on Friday.
Only companies that had a higher or equal number of Saudi employees versus expats will be eligible for the reimbursement or waiver of fees, according to the decree. Companies with a lower number of Saudis compared to expats will benefit from the initiative only after they hire more locals, it said.
“The decision will have a huge positive impact on the Saudi economy and especially the manpower intensive construction sector, which was the worst hit by the collective invoice,” Osama Al-Afaliq, head of the Saudi Contractors Association, told Reuters.
In its fiscal balance program announced in 2016 and implemented in 2017, Saudi Arabia said it would gradually increase the fees for hiring expatriates and obtaining visas for their dependents to encourage companies to hire more Saudi nationals.
It also changed the system of payment from an annual work permit renewal to a one-time lump sum payment at the beginning of the year accounting for each foreign worker employed by the company — a so-called collective invoice.
The annual fee hikes, rising gradually to 2020, were seen as crucial to Riyadh’s plan to create more jobs and cut the unemployment rate.
Some 10 million foreigners are working in Saudi Arabia.


Saudi oil refinery in Gwadar to help Islamabad save $3 billion a year

Updated 19 min 48 sec ago
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Saudi oil refinery in Gwadar to help Islamabad save $3 billion a year

  • The refinery would produce up to 300,000 barrels per day once completed
  • Saudi Arabia is also setting up reservoirs for liquified natural gas in Pakistan, says Petroleum Minister Ghulam Sarwar Khan

ISLAMABAD: Pakistan expects to agree a deal to build an oil refinery and petrochemical complex at the Balochistani deep-sea Port of Gwadar, during the first state-level visit by Saudi Arabia’s Crown Prince Mohammed bin Salman.

The deal will see Pakistan join with Saudi Aramco to build the facility, expected to cost $10 billion.

“We are working on feasibility studies for the establishment of the oil refinery and petrochemical complex in Gwadar, and will be ready to start by early 2020,” Pakistan’s Minister for Petroleum Ghulam Sarwar Khan told Arab News on Thursday.

Once established, the project will help the South Asian nation cut its annual crude oil imports by up to $3 billion annually, in addition to creating thousands of job opportunities in the impoverished western province.

The country spends more than $16 billion each year on importing 26 million tons of petroleum products, including 800 million cubic feet of liquified natural gas (LNG) from Saudi Arabia, the UAE and other Gulf countries.

Khan claimed the refinery would produce up to 300,000 barrels per day once completed.

“The Saudi authorities have asked us to complete all the initial work on the project on a fast track, as they want to set it up as early as possible,” he said.

A Saudi technical team, including Energy Minister Khalid Al-Falih, has visited Gwadar twice in recent months to examine the site for the refinery, getting briefings from Pakistani officials on security in the area near the border with Iran.

“We will ensure complete security for Saudi investments and people working on the project. A detailed security plan has already been chalked up with help of the security agencies,” Khan added.

Pakistan currently has five oil refineries, but they can only satisfy half of its annual demand. Islamabad and Riyadh have long maintained strong ties, with the latter repeatedly offering the former financial assistance. Last year, the Kingdom guaranteed Pakistan $3 billion in foreign currency support for a year, and a further loan worth up to $3 billion in deferred payments for oil imports, to help stave off an economic crisis. The Islamic Republic also received $3 billion from the UAE to protect its foreign reserves.

Khan added that the Pakistani-Arab Refinery Co. (PARCO) was also setting up an oil refinery at Khalifa Point, near the city of Hub in Balochistan. 

“The work on this project is at an advanced stage. Land for it has been acquired and other formalities are being fulfilled,” he said.

Khan hopes the world’s perception of Pakistan will change upon completion of these deals, after years of war in the surrounding region. Exxon Mobil returned to Pakistan last month after 27 years, and started offshore drilling with $75 million of initial investments. 

“All results of the drilling are positive so far, and we expect huge oil and gas reserves to be discovered soon,” he said.

“More foreign companies are contacting us to invest in offshore drilling and exploration. Saudi Arabia is also setting up reservoirs for LNG in Pakistan. More Saudi investment will come to Pakistan with the passage of time.”