Construction Sector Turmoil Affects Citizens Most

Contracting firms are being faced with an increasing shortage of labor and high wages, bringing the problem to a level that has doubled compared to before the Corona pandemic, especially with the issuance of construction permits for more than 25 thousand housing units in Al-Mutla'a, South Abdullah Al-Mubarak, and Southern Khaitan, which has led to citizens of these areas suffering both mentally and financially.

A local Arabic daily reports that managers of construction companies claim that the labor market is chaotic in the absence of supervision and claim that a large number of "street contractors" work individually without any municipality affiliation, classification or commercial headquarters, pointing out that several cases in court are related to fraud operations against citizens or breaches of contracts.

According to Khaled Al-Malki, CEO of Rikaz Contracting Company, over 25,000 housing units were built in the areas of Al-Mutlaa, South Abdullah Al-Mubarak and Southern Khaitan on March 14, 2021, causing a huge labor shortage that the local market could not meet.

It was pointed out that building permits were delivered at the same time as Corona crisis, the total and partial bans, and the exodus of some 250 thousand workers in 2020/2021. He explained that Kuwait needed at least half a million workers before Corona, but now it requires about 750,000 workers to fill the shortage and finds it difficult to balance supply and demand.

The average wage of a worker has increased by nearly 100 percent, while the wages of a technical worker have increased by about 200 percent, which places a strain on the budgets of the plot owners. As a result of some workers exploiting the conditions and a lack of adequate oversight by the relevant state institutions, many plots were suspended and the construction was not completed, resulting in the suspension of work in a large number of plots.

A number of workers have recently turned into "street contractors", contracting with plot owners without the presence of a legal entity, municipality classification, or commercial headquarters. This has resulted in chaos in the labor market, with the Ministry of Affairs tightening its policy on contracting companies' requests for more workers.

“The Ministry of Social Affairs refused to allow us to hire enough workers from outside Kuwait to cover the company’s projects, despite the fact that we submitted documents proving the projects are worth 8 million dinars,” al-Maliki said. In spite of submitting a request to the ministry, only two workers were approved after a long documentary cycle that lasted about 90 days, despite the fact that 20 workers were required.

In addition to their control of prices, which strains the budget of the owners of the plots, he pointed out that the absence of oversight has generated many cases of fraud operations in which citizens have been victims due to the lack of oversight on many contractors who contract with the owners of the plots without any legal status.

Al-Maliki commented on how contracting companies are raising labor wages and building material prices: “The contract is conditional on the contractors, so both parties are supposed to abide by its terms, which forced many companies to complete work according to previous prices, despite incurring losses,” stressing the necessity for flexibility. Within the terms of the contract, the price changes according to market changes in materials and labor.

Comments Post Comment

Leave a Comment

Submit