Mega budget, but visa woes drag down KSA contractors

Mega budget, but visa woes drag down KSA contractors
Updated 12 January 2014

Mega budget, but visa woes drag down KSA contractors

Mega budget, but visa woes drag down KSA contractors

Record amount of funds allocated for infrastructure and construction projects in the Kingdom’s 2014 budget would prove to be infructuous unless it is matched with sufficient number of visas for expatriate workers, avers a top industrialist.
“An increase in the budget and a decline in the issuance of visas don’t go well,” said Fahd Al-Hammadi, chairman of the contracting committee at the Saudi Council of Chamber of Commerce and Industry.
He said various ministries awarded 2,330 contracts worth SR157 billion last year and SR248 billion had been earmarked for projects.
Al-Hammadi said the shortage of workers for projects was causing delays and jacking up costs above estimates.
“When contractors wait for several months to organize visas, how can they complete the projects,” he wondered.
Experts pointed out that there was an impressive and historic increase in public spending in the new budget on infrastructure and welfare projects. Construction and maintenance companies have a vital role to play in this scenario.
In an effort to comply with the new job regulations, ministries have been stressing on contracting companies to boost employment opportunities for unemployed Saudi youth. According to the Labor ministry’s statistics, the construction sector has about 3.7 million expatriate workers. About 1.2 million expatriate employees had regulated their status within the sector during the correction campaign.
To improve the Saudi employment percentage in the construction sector, the ministry drastically reduced the number of job visas from 500,558 to 284,498 in 2013.
Although there has been a minimal increase of Saudi nationals in the construction sector — from 5 percent to 8 percent — they still comprise only a fraction of the total workforce in the sector which is far from the stated objective.
Also, these jobs are mainly confined to administrative positions.
The Saudi Council for Engineers has also emphasized the need to recruit Saudi nationals to execute and tender government projects.
Industry sources said ministries are also demanding applicant’s details prior to tendering projects.
The ministries of transport, health, municipal affairs, water and electricity are now emphasizing on such data.
After the companies win tenders and prior to signing of the contracts, the awarding ministry now asks for additional information about the personnel scheduled to work on those projects including the profession and sponsorship details of the expatriate staff.