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Sat 4 Oct 2008 04:00 AM

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Bahrain contractors in crisis over alleged visa, fees racket

Bahrain's construction industry is on the verge of a crisis with some contractors threatening to strike in the face of an alleged visa racket and increasing labour fees that have put 27 contractors out of business, according to the Bahrain Contractors Association (BCA).

Bahrain contractors in crisis over alleged visa, fees racket
Twenty-seven Bahrain contractors have already shut down as a result of new fees.

Bahrain's construction industry is on the verge of a crisis with some contractors threatening to strike in the face of an alleged visa racket and increasing labour fees that have put 27 contractors out of business, according to the Bahrain Contractors Association (BCA).

In the last two months the cost of a two-year working visa has increased from US $397 (BDH 150) to $530, with a monthly levy of $26.50 per worker also being introduced.

BCA president Nedham Kameski said 27 small contractors have already shut down as a result of the fees and many more will soon follow unless it is scrapped.

He said contractors complying with the law cannot compete with rogue contractors dodging the fees by employing workers illegally using free visas.

"Everybody is cheating the system and the government cannot catch them because the industry is like the Mafia," Kameski said.

"Businesses with commercial registration are buying hundreds of visas from the government for $55 and then selling them to contractors on the black market for $550 to $825," he added. "Other big contractors are just stealing workers directly from smaller firms by offering them an extra $2.8 or $5.6 dinars.

"These contractors then don't have to pay the monthly fee along with all the other entitlements - accommodation, transport, medical, flight tickets, leave, food, training, insurance - this is what's happening. Things are really bad here now."

Kameski said removing the labour fees altogether would kill demand for black market visas and level the playing field for all contractors.

He said current efforts by the Labour Market Regulatory Authority (LMRA) to crack down on illegal visa workers were ineffective, a claim which the LMRA has dismissed.

LMRA spokesman Waheed Al Balushi said they had inspected 61,042 establishments with commercial registration in the last two months and will eventually clean up the market.

"The LMRA only officially launched its services to the private sector in July," he said.

"The Bahrain labour market has suffered from illegal practices for more than 30 years so it is illogical to expect the LMRA to completely clean up the market in three months.

"That said, we are putting significant pressure on offenders by issuing huge fines and this is starting to have an impact."

Al Balushi would not comment on whether the government would consider removing labour fees, except to say that the LMRA's board of directors periodically reviews the situation.

He said he is skeptical of reports that contractors are closing due to the fees, and would like the business names and descriptions of their bankruptcies revealed.

Kameski said he will release the names when he gets permission from the companies some time after the Eid holiday.

He said Bahrain's leadership is unaware of the situation and he hopes they will step in before more contractors shut down and strikes are organised.

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