Effect of amnesty law on Construction Time
One area were most of UAE illegals used to work is construction. Most contractors use them to beat deadlines or whenever they have a second shift or are short of workers. Subcontractors as well use these illegals that is why their numbers were in the hundred thousands accumulating over years. Now that most of them have left because of the amnesty law, I wonder how much of delay we can see in Emirates City. I used to visit the site on Fridays and used to see construction going on, but last couple of weeks, it is a different scene. The site looks deserted. I just wish that the effect on completion is minimal, although I do believe that the impact of project delays will be felt in every project.
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Effect of the Labour Shortage
Thanks djamel05 for your timely udate! Like darwish we all felt the effect of your silence. I have been follwing all your comments from other forums as well.
Coming back to the point of the labour shortage which is causing problem to the current projects. I just wonder what is going to happen to the new projects which has not even started as yet?
Paradise Lake Tower B8 was due for completion in Nov 2008, some of us were planning to come to Ajman at the end of Dec 2008 for the official hand over, well it is back to the drawing board again.
Lee
Article Confirm problem caused by Amnesty Law on Construction
Amnesty Sparks Construction Labor Shortage in the UAE
Ali Khalil, Agence France Presse
DUBAI, 7 September 2007 — The departure of tens of thousands of illegal foreign workers from the United Arab Emirates under an amnesty has created a labor shortage in the country’s booming construction sector. “It is creating an impact on construction sites... About 300,000 workers have evaporated from the market,” said Mike Cairney, director of EC Harris construction consultancy firm in Dubai.
“A lot of workers who have taken advantage of the amnesty have been working in construction,” he said, and added that complaints about a lack of workers have already been heard on building sites. The UAE said this week that nearly 279,000 illegal laborers had taken advantage of a three-month amnesty to either formalize their status or leave.
Some 185,000 of those were based in Dubai, which is currently undergoing a construction frenzy. Illegal workers seeking to quit the Gulf country have now been given a deadline of another two months to leave. “There is definitely a pressure in the labor market due to an ongoing shortage of skilled labor... In the short term this is being compounded by the departure of illegal workers,” said Sana Kapadia, equity analyst at EFG Hermes investment bank in Dubai.
The booming construction sector absorbs most of the hundreds of thousands of low-paid workers who come primarily from India, Pakistan and Bangladesh and who can earn as little as $200 a month.
But as many began heading home, the local press reported a shortage of labor in various construction jobs including skilled plumbers, electricians and masons. “At one time we had 500 employees on sites. Now we have only 80,” the daily Emirates Today quoted one contractor as saying. The shortage is now expected to trigger an increase in wages aimed at luring back workers who have had to leave.
“Wages in construction will have to increase for both skilled and unskilled labor,” said Kapadia, adding that UAE firms now face the extra cost of training unqualified workers.
Cairney agreed that the shortage will lead to an increase in labor costs, in order to convince South Asian workers to return.
“They would not come back for the same money,” he said. An Indian worker might now prefer to stay home where the construction sector is also booming, he added.
Meanwhile, workers who have decided to regularize their status in the UAE are now in a better position to demand more money and better working conditions when signing new contracts.
Workers are also becoming increasingly vocal in demanding that their poor working conditions improve, with some staging sit-ins and demonstrations even though public protests and unions are banned in the UAE.
On Monday hundreds of construction workers gathered near a building site in Dubai demanding better pay and protesting at not receiving annual air tickets to fly home, as they should under UAE labor law.
The mainly South Asian protesters had planned to march from their living compound to the Labor Ministry but were persuaded to cancel their protest after receiving assurances of better terms, the Gulf News daily reported. The recent amnesty is seen as a step toward eliminating the exploitation of workers and improving their conditions, and the shortage of labor is expected to be temporary.
“It is a short-term adjustment, but it is for the benefit in the long term... It (aims) to look after people properly,” Cairney said.
He added that most of the exploitation of illegal workers in construction had been by manpower agencies rather than by the contractors that employed them. Kapadia said construction projects in Dubai, which already face delays in delivery, are bound to be further delayed because of the labor shortage and other capacity constraints.
Good and informative article
Good and informative article -
One would think that the fact that the workers will be asking for increased wages will also result in the prices of apartments going up. As the cost for the contractor will also increase. This is good news for us who have already purchased our properties - if they ever will get finished...
I for one would be happy to know that the people who are building my apartment are paid fairly and treated justly - even if this would mean that I would have to wait an extra year for the apartment to finish.
The big problem I see is that if the number of people who have left is nearly 1/4 of a million - that sort of shortage is almost impossible to fill on a quick notice and will lead to a massive delays to most projects in the U.A.E - which in turn will result in fines to the construction company - and that in turn can result to the construction company to feel under pressure to employ under-qualified staff to meet the deadline and then we as investors will lose as the quality will suffer.
It is a tough situation for the property market in U.A.E - and with Ajman (for example) unveiling a new major project every week, the competition for builders will be hard... we will have to sit out and see what the future holds for the construction industry in the Emirates...
But one thing I suppose we all can agree is that 'we' will suffer as a result ( increased waiting time and so on) - but I think it is still 'right' that the people who work on these sites are all fairly treated and paid.
Ajman BOund
Ajman Bound
Hi there, My first post. As
Hi there,
My first post. As I read this article, I am wondering what the news are nowadays?
Has the situation with shortage of workers improved somehow?