I had heard about problems with large firms in the Kingdom of Saudi Arabia from friends who are still working there or have recently exited the kingdom. Based on their stories and my two stints living and working in Saudi Arabia I find this interesting. The main point of interest is the inference that the Saudi government is encouraging firms to discharge their foreign workers by issuing them exit only visas and giving them a ticket home (with or without pay), and hiring Saudi National's to replace them. I find this amusing since, on my first assignment in the kingdom, we were to build a manufacturing facility in Jeddah (or Jiddah) with a capacity of 100,000 units per year for our Saudi partners. We not only built the plant, specified and installed all the necessary equipment, but hired 105 plant workers . . . All but 4 were hired as contract labor from the Phillipines. The only Saudi national in the facility was the general manager and he was a mere figurehead. We were asked by our Saudi partners if we could tell them what types of skills we looked for in staffing the factory so they could incorporate them, with our help, into the vocational technical school they had started at the behest of the government to train Saudi Nationals in those skills. We proposed a list of positions with various skill levels and job descriptions like: lift truck driver, sheet metal press brake operator, welder, brazier, wiring harness assembler, unit assembler, test operator, etc. We found out very quickly that the young Saudis attending the school had no interest in actually learning these skills or working on the plant floor when they came to tour our facility all armed with tape measures which they used to measure the size of our offices in order for them to determine whether the office sizes met with their approval for them to reside in. None of them came to work for us.

One last anecdotal story of Saudi Nationals employed in the construction business. One of my friends was associated with a construction firm in Jeddah. His firm got rid of a bunch of skilled foreign workers and hired local Saudis in their place. One of their project in Jeddah was constructing a housing complex in the city. One day, as they were putting the finishing touches on the 7th floor of the building, the entire building collapsed . . . Flattened the whole thing on to the ground killing several workers and injuring others. An inquiry into the cause of the collapse found that the building was only supposed to be 5 stories, but the Saudis in charge of the project felt they could stretch the materials and add a couple more floors which would maximize their future profits. Unfortunately, the didn't understand, or they didn't care, that concrete construction utilizing reinforced rebar required the proper amount of rebar to support the building. So, if the royal family is going to encourage (force) construction companies and other companies to get rid of their skilled foreign workers and hire Saudis in their place, we could see the kingdom of Saudi Arabia to, quite literally, fall apart.

Here is the article:


Saudi Binladin Group employees set fire to buses in protest

RIYADH, Saudi Arabia (AP) -- Employees at the Saudi Binladin Group, a construction giant, have set fire to more than seven company buses in the latest protest by disgruntled staff over not being paid salaries for months and a large round of reported layoffs.

Maj. Nayef al-Sharif, the spokesman for the Civil Defense in the city of Mecca, said late Saturday that firefighters put out the blaze without any injuries reported.

The Binladin Group has not issued any statements about the reported layoffs or the unrest. Calls and an email request for comment to the company were not immediately returned.

For several weeks, thousands of the firm's employees have been staging rare protests in Mecca and the Red Sea coastal city of Jiddah, with some saying they have not been paid for six months.

The attack on the company's buses comes a day after the Saudi Al-Watan newspaper quoted an unnamed source as saying the company has terminated employment for 50,000 foreign workers and issued them exit visas. Many of those workers are apparently refusing to leave without being paid their late wages, the newspaper reported.

Also Friday, local newspapers reported that five construction workers were injured when an official from the Saudi Binladin Group hit them with his car after employees protesting salary delays rushed toward the vehicle. Police are investigating the incident.

Gulf-based construction firms have been among the hardest-hit due to lower oil prices that have curbed and sometimes delayed government spending on major infrastructure projects. In February, the president of the Council of Saudi Chambers of Commerce and Industry, Abdulrahman al-Zamil, wrote an open letter to King Salman saying that construction firms were struggling under the weight of delayed payments for their work on government projects.

The Saudi Binladin Group is one of the world's largest construction firms. Founded in 1931 and headquartered in Jiddah, the firm has been behind some of Saudi Arabia's most important projects, including roads, tunnels, airports, universities and hotels. It has carried out expansion work throughout the holy city of Mecca to accommodate more Muslim pilgrims, including construction of a massive clock tower with luxury hotels.

The multinational firm is also a main contractor for the Kingdom Tower in Jiddah, which will be the world's tallest skyscraper at a kilometer, or roughly 3,300 feet, high.

The Binladin family has been close to Saudi Arabia's ruling family for decades. Al-Qaida's late leader Osama bin Laden was a renegade son of the construction firm's founder, Mohammed bin Laden, and was disowned by the family in the 1990s.

Despite the close family ties, the Saudi government barred the firm from acquiring new contracts after an initial government probe found the company was partly responsible for a crane collapse in Mecca's Grand Mosque last year that killed 111 people days before the start of the annual hajj pilgrimage in September.

The crane boom pierced the roof of the mosque housing Islam's holiest site, the Kaaba, bringing down slabs of reinforced concrete and leaving bodies of worshippers lying amid pools of blood on the mosque floors.

Saudi daily Arab News reported that the layoffs included engineers, foremen, steel fixers, carpenters and welders at the firm. The paper said employees were offered severance pay.

The newspaper cited various possible reasons for the terminations, including government restrictions on the firm and changes to Saudi labor law that have made it more difficult for firms to hire expatriates over local Saudis.

Other sectors have seen hundreds of layoffs as governments across the Gulf look to hire more of their own citizens and reduce public spending in the face of plunging revenues from lower oil prices. There have been layoffs in the United Arab Emirates' banking sector and at Qatar Petroleum and the Qatar-based news broadcaster Al-Jazeera, among others. In Kuwait, oil unions held a three-day strike against government cutbacks to their benefits and pay.

Masood Ahmed, director of the Middle East and Central Asia Department for the International Monetary Fund, told The Associated Press recently that one of the consequences of cutting back spending in the Gulf is that fewer people will be needed to work on government-backed projects.

"This is part of a sensible strategy to try and balance their budgets over time to improve and further their fiscal resilience and to reflect the new reality in terms of oil revenues," he said.