A general meeting held by a number of workers in the construction sector in Madinah revealed that contractors will lose 30 percent of the workforce they were supposed to have to carry out their projects after the deadline for rectifying the situation expires on the 24th Sha’ban of this year, and that this shortfall will result in a 15 percent delay in projects currently under construction.
Project Delays
During the meeting, the contractors emphasized that this shortage could lead to a decline in the number of contractors bidding on projects to be tendered in the coming period, given the lack of clarity regarding the procedures the Ministry of Labor will follow concerning the use of expatriate labor in project implementation after the rectification period ends. They inquired about the mechanisms and methods for utilizing the services of foreign workers—whether by hiring them through recruitment agencies specializing in this area, or whether the relevant government agencies, including the Ministry of Labor, will permit direct recruitment. They also emphasized the need to know all the details to prevent the construction sector from facing disruptions in this area in the coming period, which could affect the Kingdom’s development trajectory. They also addressed discrepancies in how project specifications are handled from one regional municipality to another across the Kingdom, emphasizing that this will harm small business owners and novice contractors, which could result in withdrawals from the market or a concentration of activity in regions of the Kingdom where procedures are more streamlined.
Labor Shortage
The participants addressed the labor shortage, citing several examples, the most notable of which was that some regional secretariats allow contractors to view the details of tender documents for government projects via their websites, giving them the opportunity to decide whether to purchase the tender documents and submit project bids. In contrast, some other municipal authorities do not provide contractors with project tender documents until they submit comprehensive details regarding their operational mechanisms, budgets, and various other matters. They noted that this puts novice contractors at a disadvantage, even though, as they put it, the system allows them to purchase tender documents and participate in government tenders valued at less than 4.4 million riyals.
Recommendations from the Meeting
They emphasized that the requirement to provide details regarding a contractor’s equipment, the number of workers, and budgets will result in large contractors being the ones to secure projects, to the exclusion of novice contractors, especially given the existence of government departments—such as the Department of Education—that maintain a blacklist of contractors, even though this is not within their purview, as there are agencies specifically tasked with this, according to their statements.
The meeting resulted in several recommendations, most notably: supporting, training, and employing the national workforce in the sector, and raising awareness of the banking facilities available to companies and institutions through banking specialists.