Construction

Saudi builders say new employment quotas hurting business

Builders say laws make it impossible for construction companies to execute projects

Saudi-based publicly listed construction firm, Abdullah Al Khodari Sons has said new employment quotas mandating the number of local and foreign citizens it could hire are partially to blame for the 55% surge in costs, as reported in the firm’s latest quarterly results.

Rising employment among Saudi nationals has prompted the government to introduce the “Nitaqat” programme last September, which rewards companies for meeting Saudi citizen employment quotas.

However, construction companies are expressing their dissatisfaction with the higher costs of hiring Saudis,saying that they alone are bearing the consequences of years of state mismanagement and substandard education. One owner of a leading construction company was quoted by the Financial times as saying that the government has been “schizophrenic” in its approach to Saudisation.

“On the one hand they want to spend money on projects to make life better for the population and make up for years of lack of development in infrastructure,” the unnamed person said.

“On the other hand, they make laws like Nitaqat that make it impossible for construction companies to execute these projects,” he said. Under the programme, companies rated ‘green’ are rewarded with new foreign visas and financial incentives to help train and pay Saudi staff, while those under the ‘yellow’ category cannot extend their foreign employees’ work visas beyond six years.

Firms classified as ‘red’are barred from renewing their foreign workers’ visas at all.

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