(MENAFN - Arab News) Around 75 percent of contracting companies have failed to legalize the status of their laborers since the expiry of the grace period on Nov. 3, local media said quoting a panel affiliated with the Jeddah Chamber of Commerce and Industry (JCCI).
The legalization campaign has reduced the operational capacity at the ongoing construction projects by as much as 50 percent, one committee at the JCCI said.
"The duration of the legalization period was insufficient. Only 25 percent of contracting firms were able to legalize the status of their workers in that time, which has significantly increased the number of stalled projects, Raid Al-Aqaili, deputy chairman of the committee, told a local daily.
He said contractors continue to suffer from difficulties associated with the issuance of new work visas from the Ministry of Labor.
Some contractors have even opted to purchase visas at higher prices to ensure manpower for the completion of their projects, he said.
"Many mega-projects were awarded to contractors over the last eight years, which has led to the need for large numbers of trained, skilled and unskilled laborers. Construction projects will suffer in the absence of laborers," he said.
He emphasized that constitution projects are in need of capital, equipment and labor to succeed. He proposed that the concerned government departments should demonstrate more flexibility to tackle manpower shortage.
Mohamed Salim, a Saudi businessman, said that the labor market has been adversely affected following the expiry of the grace period since a significant portion of foreign laborers were working in the contracting and construction sector. This sector, he said, is considered the most pivotal in the market because mega-government projects are so heavily reliant on its services, he said.
"The vacancies created by the mass exodus of illegal workers cannot be filled by Saudis," he was quoted as saying.
He said that the labor market lacks the existence of real indicators to highlight the effects of the ensuing manpower shortage in such an industry.
The labor campaign, however, has brought about a series of positive results, which include the eradication of cover-up businesses and other such illegal activity, he said.
Khalid bin Ali, a businessman, also said that the correction campaign has led to shortages in services direly needed by citizens.
He said experts and researchers are demanding clear-cut and indicators to reflect the real damage sustained by the labor market and assurances from the Ministry of Labor that they will deal with the situation.
He said that private schools, medical centers and commercial stores were also gravely affected by the campaign.