Mohammad bin Salman plays hardball with his economic revolution

Saudi Oger is a very big company - a huge construction and telecommunications conglomerate that employs somewhere in the neighbourhood of 50,000 people in Saudi Arabia alone.

Founded in 1978 by the Lebanese politician and businessman Rafik Hariri, it grew leaps and bounds and was frequently the contractor of choice for the ruling al-Saud family.

Rafik Hariri was assassinated in Beirut in 2005 while serving as the Lebanese prime minister. His son, Saad, took over the running of Saudi Oger - and to this day it remains completely in the hands of the Hariri family.

Saudi Oger has received many billions of dollars in deals from the Saudi government and is responsible for some of the most prestigious and lavish construction projects undertaken in the kingdom - including the King Abdullah University of Science and Technology and Riyadh's King Khaled International Airport.

Now, though, the company is in crisis. Cranes sit idle at two dozen towers in a major project in Riyadh. 

Employees have had no salary for months. One, an expat senior executive, told the Khaleej Times that he had not been paid in six months. He could not pay his children's school fees and his work permit had expired.

"I don't have money. It's hard," he told the paper.

Thousands of Filipino labourers work for the company. Some of them spoke to a radio news channel in Manila to say that they too had received no wages. One told the station that workers plead, "but every time they go to the office, they are driven away like lepers". 

Saudi Oger points the finger of blame at the government. 

Low oil prices mean that cash it says it is owed has not arrived, as Saudi Arabia embarks on a belt-tightening exercise intended to rein in extravagant spending.

But that argument doesn't wash with Mohammed bin Salman, arguably the most powerful man in the kingdom. He is, after all, the deputy crown prince, chair of the hugely influential Council for Economic and Development Affairs, defence minister and favoured son of King Salman.

Not the man you want to get on the wrong side of an argument with.

Saudi Oger can't cover their own labour costs. That's not our problem

The crown prince was brutally clear about Saudi Oger in a 4 April interview he gave to Bloomberg: "We have paid them many instalments, but they have debt in and out of Saudi. So as soon as money is transferred to their bank accounts, the bank withdraws it. Saudi Oger can't cover their own labour costs. That's not our problem, that's Saudi Oger's."

There are other large companies Mohammed bin Salman could have called out - but he chose to name just one. No question, it didn't help their cause that the Hariris are Lebanese.

Lebanon neglected to condemn the sacking of the Saudi embassy in Tehran earlier this year, and the Saudis remain rather cross.

But in cutting Saudi Oger adrift as the company flounders, the prince was not simply exercising a fit of pique. He had a larger message to convey.

Mohammed bin Salman has embarked upon an economic revolution the likes of which neither the kingdom - nor indeed the region - has ever before experienced.

He is pushing an agenda that he freely admits is Thatcherite: privatise, privatise, privatise. Among other heretofore untouchable state institutions, he has targeted the healthcare system, which will move into the private sector and be insurance-based.

A small slice of Saudi Aramco will be sold off, while moving the rest of the oil giant into the Public Investment Fund (PIF) - becoming, at $2 trillion, the largest sovereign wealth fund in the world.

Ending subsidies, job creation in the private sector, the selling off of large tranches of government-owned land - these are just a part of his revolution.

Mohammed bin Salman is also kicking a moribund "Saudisation" programme back into life. As he put it in a January interview with The Economist: "I have ten million jobs that are being occupied by non-Saudi employees that I can resort to at a time of my choosing."

The prince is also keen to empower women in the workplace because "a large portion of my productive forces are unutilised".

And he appears determined to end government waste, inefficiency and corruption. In his Bloomberg interview, he spoke of a culture where ministries with little or no oversight had committed to more than $1 trillion in projects with, as the prince put it, "no contractual agreements (being) made by these entities".

There are other large companies Mohammed bin Salman could have called out - but he chose to name just one

So he froze the deals last year, whether they were contracted or not - a move that left Saudi Oger very much out in the cold of the desert night.

A major plank of his economic revolution is the commitment to build "affordable housing". With experts placing the shortage at more than 1.5 million homes and a young, fast-growing population, housing is key to carrying the people with him.

Give them affordable housing and gainful employment and they will accept subsidy cuts and an end to institutions such as free healthcare. And that is where the attack on Saudi Oger comes in.

For years, developers and builders have catered to the luxury market, building condos and villas that ordinary Saudis cannot afford. Valuable urban land has been left to sit idle in order to drive up its market value. Corruption has flourished. 

Making an example of Saudi Oger, once and not so very long ago the favoured choice of the ruling al-Sauds, is a classic case of pour encourager les autres.  

The message is clear: the government will no longer cultivate excess and reward failure, if for no other reason than that housing is a key element in the coming Saudi economic revolution. So it's "deliver on time and within budget" - or face the wrath of Mohammed bin Salman.

As for the unpaid workers, well the deputy crown prince could not have been more dismissive: "[If] Saudi Oger can't pay a thing to its own contractors and workers, that's their own problem. They can take them to court."

Such a thing would be an unlikely outcome, given that most of the workers are impoverished foreigners.

Being decisive to the point of ruthlessness is a trait the young prince often displays. Useful, no doubt, when you are leading a revolution - but dangerous too.

Bill Law is a former BBC Gulf analyst. Follow him on Twitter: @Billlaw49


Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab, its editorial board or staff.