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3. Legislation relating to the labor market:
The company activity is related human resources entrusted
implementation of the company's business, and still decisions,
initiatives and programs successive issued by the Ministry of
2. Fluctuations of Construction Labor negatively affect existing company projects, the bidding
projects or the awarded projects before the issuance of these
Material Prices and its Availability
initiatives.
It should be noted that these legislative variables did not
The construction sector relies mainly
observe the special nature of the construction sector as a
on building and construction materials.
non-national employment attractor sector and lack of In addition, there are some indications
Moreover, it is difficult to store all the
professionals in sufficient number of citizens as well as the that the Human Resources
project needs from construction
lack of training and the reluctance of citizens working in Development Fund to examine some
materials while it is not common sign
remote projects since most of them wish to exercise of the initiatives that will mitigate
agreements in order to fix the prices
administrative work. these effects, For example, studying to
with suppliers. Therefore, suppliers
be a certain function of settlement
tend to push the price hikes in order to Indicators showed the inability of most companies to absorb and not for the entire sector, which
be beard by contractors. Thus, this many appointments to maintain resettlement without will reflect positively on the company
company activities will be affected little productivity, which carry the company increased costs by applying localization in an effective
negatively in case of the unavailability peaked decision payout for work permits and other decisions way commensurate with the nature of
of materials in order to deliver projects (recruiting - work permits) exceeding direct costs the construction sector and real
approximately 50 million riyals, plus indirect costs which
on time, or due to material prices positive impact which will result in
cannot be overlooked.
increased significantly. That resulted in lower costs of resettlement ratios
In order to confronting with the effects of the risks associated
lowering amounts spent on projects without any productivity offset and
with the legislative labor market variables, the company has
operating expenditures. Hereafter, it the Fund also issued legislation
within its efficiency to reduce employment in particular rework permit fees applied difference
must acknowledge that the company
sectors where investment is not expected to expand in the in 1/1/1434 government projects that
follow strict procedures in order avoid foreseeable future, to review the costs and reduce
or mitigate these risks. expenditure. occurred before the fee increase.
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