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Saudisation programme causing project delays

Drive to replace foreign workers with locals disrupting industry

Saudi contractors are said to be experiencing labour problems due to government action.
Saudi contractors are said to be experiencing labour problems due to government action.

Saudi Arabia’s drive to get more of its nationals employed in the construction industry is having a negative effect on the delivery of projects, according to an industry expert.

Since June 2011, companies in Saudi Arabia have operated under the Nitaqat (meaning “zones” or “ranges”) Saudisation programme, a system of penalties and incentives that encourages firms to employ a greater percentage of Saudi nationals.

Full implementation of this ministerial resolution was required by last year, with government figures stating that it has provided around 255,000 jobs to Saudi nationals since it came into effect.

However, a source has told Arab News that the programme, along with the government’s visa crackdown last year which saw tens of thousands of foreign construction workers sent home, has had a devastating effect on Saudi Arabia’s construction industry.

“Many projects in both the public and private sectors are pending. Various buildings under construction in the Saudi capital look abandoned because workers are nowhere in sight,” said the source.

He added that the expense of securing visas for additional foreign workers is too great for most small contractors to afford.

“The price of visas is too costly, in addition to the additional SAR 2,400 per year for each expat. In fact, some contractors have abandoned their projects,” he said.

Contractors in Saudi Arabia requiring 50 visas or more for foreign workers have to go to what is called a “mega house” where each visa costs SAR 8,000.

The source said that some contractors with deep pockets are able to continue their work on projects like King Abdullah Financial District (KAFD), albeit with a skeletal force.

“This explains why there are about a hundred or more workers at the project site during working hours,” he said.

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