Finance Minister Mohammed Al-Jadaan

The body set up by Saudi Arabia to cut the costs of government projects has identified up to SR17 billion ($4.53 billion) in further efficiency savings, Finance Minister Mohammed Al-Jadaan has told Reuters.

Government sources had told Reuters earlier this week that Riyadh was ordering ministries and agencies to review billions of dollars’ worth of unfinished infrastructure and economic development projects with a view to shelving or restructuring them.

The action forms part of Saudi Arabia’s reform plan aimed at shifting its economy away from reliance on hydrocarbon revenues and paring back support for a generous welfare state to cope with the reduction in crude prices.

Al-Jadaan said this was the second major effort by the Bureau of Capital and Operational Spending Rationalization since its establishment, after previous efforts highlighted SR80 billion of savings in 2016.

“They just were making sure that they (the projects) are done in the most efficient manner. They are about to conclude their work and they have identified about SR15 billion or SR17 billion of savings so far,” Al-Jadaan said.

The introduction of a 5 percent value-added tax should also bolster the Saudi government’s coffers. Al-Jadaan said Saudi Arabia is “ready and willing to implement” the tax on schedule on Jan. 1, 2018 and it could happen without other Gulf countries.

To help bolster the economy, Saudi Arabia is preparing a number of mega development projects. The first, an entertainment district south of Riyadh that will house sports, cultural and recreational facilities including a safari and a Six Flags theme park, was unveiled this month.

Al-Jadaan said further schemes would be announced in October, when the Public Investment Fund unveils its strategy.