Labor crisis hits 36% of construction projects

The number of registered construction project contracts in the Kingdom was 250,000 before the first grace period to legalize expatriate workers ended. However, 90,000 of these registered contracts belonging to small contracting companies have since been canceled, according to Raed Aqeili, a member of the National Committee in Saudi Chambers.
Most big projects were affected by this decision because they relied on small companies for employment. During the grace period many of the contractors moved their employees to other sectors, while some individual workers returned to practice professions stated in their iqamas, or residency permits, Aqeili added.
Some contracting companies have the professional skills, but they need to exert more effort in executing their businesses. After laborers left these companies, their projects were temporarily affected. Aqeili feared the problem might escalate in the coming months, especially after the end of the grace period.
Aqeili said contracting companies need to hire professional laborers who can carry out contracting work from rental companies.
The cost of the current five-year plan for projects — which started in 2009 and will finish in 2014 — is SR400 billion. But most of the projects have not been completed.
Aqeili hoped labor crisis would be resolved. He said speedy solutions need to be reached to guarantee the existence of sufficient labor in the contracting markets to avoid further crises.