Labor visa limitations pose challenge for contractors

Minister of Economy and Planning Muhammad Al-Jasser was the keynote speaker at the third annual Saudi Mega Transport and Infrastructure conference at the Al-Faisaliah Hotel.

Minister of Economy and Planning Muhammad Al-Jasser was the keynote speaker at the third annual Saudi Mega Transport and Infrastructure conference at the Al-Faisaliah Hotel.

The limited number of labor visas for foreign workers owing to the Kingdom’s nationalization program has led construction companies to look for alternative solutions to deal with the acute shortage of skilled labor required for the completion of the massive projects still underway in several major cities.

The third annual Saudi Mega Transport and Infrastructure conference organized by MEED held recently focused on ways to tackle this issue, the current projects in the Kingdom and labor availability, training Saudi workers, and Nitaqat (nationalization) requirements.

The conference held at Al-Faisaliah Hotel featured a keynote address by Minister of Economy and Planning Dr. Muhammad Al-Jasser and speeches by a number of suppliers in the region.

King Saud Trust Foundation head Prince Khalid Al-Saud was the guest of honor at the event.

As the largest construction market in the Middle East, Saudi Arabia has delivered megaprojects worth $350 billion that will have a long-term impact upon the economic and social development of the country.

Ayman Nahas, vice president and regional director of Louis Berger, said that the main challenge is finding qualified resources in a timely manner.

“The labor shortage forces contractors to go to the local market that often lacks the required skills, but we are working with government agencies to resolve this short-term issue,” he said.

Construction companies are dealing with the 6 percent requirement of Saudi labor by training them from the initial stages of the project.

Mustapha Talha, business development director of Alstom Transport, said that hiring Saudi labor has been challenging but they have the capability to do so as long as extensive training is delivered from the design phase, which gives more time for them to grow accustomed to the regulations.

Saudi manpower companies are working on improving their services for providing trained workers within a few weeks, which previously took several months.

Omar Al-Juraifani, CEO of Esad Manpower Company, pointed out: “The solution to the labor crisis is that companies should focus on their specialization; for instance construction companies shouldn’t do logistics.”

“Foreign companies need to understand that the regulations are constantly evolving,” Al-Juraifani said, adding, “New laws are being introduced by the end of this year, which will give more rights to employees, wages protection, environmental and safety regulations.”

Faisal Al-Fadl, Head of the Organizing Committee of the conference said: “My advice to foreign companies is to develop a partnership with a local company and try to engage at least 30 percent of transference of knowledge to the local community.”

Foreign companies are increasingly managing larger projects, but owing to the labor shortage, about 200,000 construction companies have been forced to leave the market recently.

 
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