Cyprus Mail
Cyprus

Cyprus contractor reportedly defaults on $2 billion debt in Saudi

The Saudi unit of Joannou & Paraskevaides has defaulted on about 7 billion riyals ($1.9 billion) of bank loans, Bloomberg new agency reported quoted unnamed sources close to the situation.

It said the defaults are the result of problems getting paid by the Saudi Ministry of Interior in addition to internal problems within J&P.

In a letter addressed to President Nicos Anastasiades published on Saturday, the around 5,000 third country national employed by J&P in Saudi Arabia who cannot go home as their contracts have expired meaning they have no travel documents, the company owes them a total of €12 million for back pay and end of service benefits.

They say they are only managing to feed themselves by selling scrap materials, while their health benefits have also been cut, meaning only the most urgent of cases can be paid for, again by the sale of scrap materials.

Saying some of them had worked for the company for 40 years, they have called on the president to intervene and make sure they are paid their dues.

After facing a huge budget deficit, Saudi Arabia suddenly halted payments to government contractors causing chaos among local construction firms, which had a knock on effect on J&P.

According to Bloomberg’s sources, infighting within J&P meant that the company did not give enough attention to problems within Saudi Arabia.

J&P’s projects in the kingdom include large housing developments for the Ministry of Interior and building parts of the King Abdullah Financial District in Riyadh.

Foreign ministry deputy permanent secretary Marios Ieronymides travelled to Saudi Arabia to speak to Cypriot employees of J&P Overseas who have been left in limbo after the construction company went into liquidation.

Last week, the government said it would pay for Cypriot staff to return to the island.

The company used to employ around 6,000 people in Saudi Arabia, of whom around 200 are Cypriots.

The Cypriot employees had said that they hadn’t been paid for five months and some could not afford to buy air tickets to return to the island.

They had also said that the company has misappropriated the amount withheld from their wages for social insurance and the welfare fund, which have not been paid to the Cyprus government for 2017 and 2018.

Stranded in Saudi Arabia are also around 5,000 nationals from Sri Lanka, India, Bangladesh, Pakistan, the Philippines, Vietnam, Nepal and Egypt, employed by J&P Overseas.

In a series of letters released to the media in recent weeks, they have said they are now living in camps like prisoners as their work permits have expired and they are unable to move freely in the country.

Similar conditions are faced by J&P Overseas staff elsewhere in the Gulf.

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