As many as 80 per cent of construction projects in Saudi Arabia could suffer delays because of the introduction of a labour law restricting foreign employment, contractors warned yesterday.
A backlog of about 450,000 foreign construction workers were still waiting for the correct paperwork, said Raed Al Aqeeli, the vice chairman of the contractors' committee in the Jeddah Chamber of Commerce and Industry, with the new laws set to come into full force on July 3.
"We still can't see the government apparatus gearing up to accommodate and clear the large numbers of paperwork and transactions, which are estimated at 450,000," he told the Saudi newspaper Arab News.
"The time period is just not enough considering the fact that the sector was totally dependent on illegal labourers and part-time workers, as well as small enterprises. Under the circumstances, it would be difficult for companies to manage the worker shortage issue," he added.
Under Saudi Arabia's recently introduced Nitaqat programme companies are required to hire one Saudi national for every 10 migrant workers. Any workers left without a job or a sponsor must leave the country. After a grace period that ends on July 3, any expatriates found in the country without the correct visas face prison and heavy fines.
The rules, aimed at providing 1.12 million new jobs for Saudi nationals by next year, stipulate that firms failing to employ a sufficient number of nationals face heavy fines.
The rules cause particular difficulty for construction companies that rely on employing large teams of unskilled foreign workers. Contractors estimate Saudi nationals comprise less than 10 per cent of their workforces, while for white-collar industries such as banking, the figure is estimated at about 60 per cent.
A significant number of the contractors operating in Saudi Arabia are companies based in Abu Dhabi and Dubai that have been attracted to the lucrative Saudi market in growing numbers since the global financial crisis hit the UAE.
The Dubai-based Drake & Scull International, one of the largest contractors in Saudi Arabia employing 10,000 people in the kingdom, said that only about 700 of its workforce were Saudi nationals. It hoped to increase the number "in line with local laws". The Saudi market accounted for 45.8 per cent of DSI's work last year.
"We have right now 10,000 people on the ground in Saudi Arabia. Drake & Scull is one of the top 10 companies in Saudi Arabia today," said Khaldoun Tabari, DSI's chief executive. "In Saudi Arabia is there enough talent to do all the work they have? Probably not. But there are management positions, whatever. Right now in our projects, we have hired around 450 Saudi workers. We are doing our bit."
"You have to be part of the society you are living in. That's why yesterday we were issued [with] 3,900 more visas. Why? We are pro-active with the labour office there in hiring local people. Are they all 100 per cent productive? Maybe not. So eventually they will be. What else can you do?"
lbarnard@thenational.ae
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
Should late investors consider cryptocurrencies?
Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.
They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.
“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.
He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.
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Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 VAT and Dh166,464 VAT
On sale: now
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BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
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Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
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Saturday
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Sunday
Sampdoria v AC Milan (2.30pm)
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now