Labour reforms hit Saudi small contractors
Riaydh, March 25, 2014
Shortage of manpower following the new labour reforms in Saudi Arabia has resulted in the closure of more than 50 per cent of small and medium-sized contracting firms, a report said.
Apart from shortage of qualified labour, wages have also skyrocketed to as much as SR200 per day, the Arab News report quoted several contractors as saying.
Meanwhile, contractors have requested the Ministry of Labor to grant them certain exemptions and issue temporary visas to hire labourers in order to complete projects on time, it said.
“The shortage in manpower and ever-increasing wages will remain the biggest challenges facing the contracting sector,” Fahad Al-Hamadi, head of the National Contractors Committee at the Council of Saudi Chambers (CSC,) told a local daily. “These factors combined have led to the faltering of small and medium-sized enterprises (SMEs) and their exit from the local market after incurring huge losses over the last four months. Some 60 percent of subcontracting companies implementing mega-projects are SMEs and are no longer capable of finalizing such massive-scale projects for these reasons,” he said in the report.