JEDDAH — A number of small and medium-size contracting establishments have gone bankrupt and forced out of the market for a variety of reasons, including the rise in salaries of foreign workers that have increased by more than 150 percent, a local daily reported on Wednesday. Abdullah Ridwan, chairman of the contractors' committee at the Jeddah Chamber of Commerce and Industry (JCCI), said the daily wages of the laborers went up from SR40 to SR100, an increase of 150 percent. “This is in addition to the rising costs of the issuance and renewal of iqamas and the shortage of foreign workers resulting from the residency status correction campaign,” he said. Ridwan did not specify the number of the small and medium-size contracting establishments that have announced their bankruptcy but said many of them had left the market. “Many of these companies had indirect government contracts that were sublet to them by major contractors,” he said. Abdul Rahman Al-Kheraiji, a member of the National Committee of Contractors (NCC) at the Saudi Council of Chambers, said the contracting sector had suffered an acute shortage of foreign manpower due to the status-correction campaign. The contracting sector depended largely on illegal foreigners who met about 50 percent of its labor needs, he said. Al-Kheraiji said many contracting establishments were forced to quit the market due to the high rise in labor costs. “A number of the contracting establishments were forced either to recruit new foreign manpower or transfer the iqamas of many illegal foreigners they had hired. In either case they incurred huge expenses,” he said. Al-Kheraiji said a large number of illegal foreigners had to leave the country on final exit visa as a result of the correction campaign, causing a huge decline in the number of qualified manpower in the sector. “The number of workers in the contracting sector has gone down by more than 20 percent,” he said. Youssef Al-Ahmadi, a member of the NCC, agreed that many contracting establishments were forced to leave the market but said it was not because of a shortage of manpower created by the correction campaign. “There are many other factors that had driven the small and medium contracting companies out of the market, including, among others, the delay in paying them their financial dues after completing the projects,” he said. He accused the Ministry of Finance of delaying the payments to the contracting establishments for up to 12 months. “This is enough reason to delay the projects and to drive the contracting establishments out of business,” he said.
