{"id":20513,"date":"2016-05-08T07:50:49","date_gmt":"2016-05-08T12:50:49","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20513"},"modified":"2016-05-08T07:50:49","modified_gmt":"2016-05-08T12:50:49","slug":"saudi-arabias-oil-bust-cash-flow-debacle-begins-to-bite","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20513","title":{"rendered":"Saudi Arabia\u2019s Oil-Bust Cash-Flow Debacle Begins to Bite"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/05\/07\/saudi-arabia-cash-flow-oil-bust-unpaid-bills-layoffs\/\">Saudi Arabia\u2019s Oil-Bust Cash-Flow Debacle Begins to Bite<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Hangover of oil dependence has only just begun.<\/strong><\/p>\n<p>It was supposed to be the biggest, most ambitious, most lucrative infrastructure project Spain\u2019s construction industry had ever undertaken on the Arabian Peninsula. Launched three years ago, the high-speed rail link project between Medina and Mecca was a dream come true worth some \u20ac6.7 billion, the perfect payoff of decades of patient lobbying of the House of Saud by Spain\u2019s former King Juan Carlos I. But now it\u2019s a rotting financial albatross around the necks of 12 large Spanish companies.<\/p>\n<p>Even from the beginning, things were not easy. Within a year and a half, the project was suffering significant delays. And\u00a0two months ago, the consortium asked the Saudi government for more funds \u2014 \u201can absolute minimum of \u20ac1.4 billion\u201d \u2014 to cover the Saudi Railways Organization\u2019s \u201cunforeseeable demands,\u201d such as,\u00a0<a href=\"http:\/\/wolfstreet.com\/2016\/03\/12\/saudi-arabia-nightmare-for-spanish-construction-consortium-ohl-talgo-renfe-adif\/\" target=\"_blank\">amazingly, keeping desert sand off the tracks<\/a>.<\/p>\n<p>None of the consortium partners want to take responsibility \u2014 or the attendant financial hit \u2014 for keeping sand off the tracks. And the House of Saud, already hemorrhaging money due to the oil bust, is in no position\u00a0to pay Spanish companies\u00a0extra funds for it.<\/p>\n<p>Now, news is leaking that the Saudi Railway Organization stopped paying advances on the consortium\u2019s work over six months ago. According to the Spanish financial daily\u00a0<a href=\"http:\/\/www.arabianbusiness.com\/qatar-rail-cancels-1-4bn-doha-metro-stations-deal-630767.html\">Expansi\u00f3n<\/a>, the consortium could be owed hundreds of millions of euros in late payments. Although the reasons for non-payment are as yet unconfirmed, sources in Spain are blaming it on the House of Saud\u2019s acute cash-flow problems.<\/p>\n<p>Saudi Arabia\u2019s oil-dependent economy is in a bit of a pickle. For its budget to break even, the country needs an oil price of $104 a barrel,\u00a0<a href=\"http:\/\/www.middleeasteye.net\/columns\/gcc-starts-tightening-its-belt-glimmers-future-austerity-gcc-1500-529206777\" target=\"_blank\">claims<\/a>\u00a0the Institute of International Finance.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Saudi Arabia\u2019s Oil-Bust Cash-Flow Debacle Begins to Bite Hangover of oil dependence has only just begun. It was supposed to be the biggest, most ambitious, most lucrative infrastructure project Spain\u2019s construction industry had ever undertaken on the Arabian Peninsula. Launched three years ago, the high-speed rail link project between Medina and Mecca was a dream [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[3055,5660,13762,1775,595,701,4255],"class_list":["post-20513","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-cash-flow","tag-don-quijones","tag-oil-dependence","tag-oil-price-collapse","tag-oil-production","tag-saudi-arabia","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20513","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20513"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20513\/revisions"}],"predecessor-version":[{"id":20514,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20513\/revisions\/20514"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}