Published on June 27, 2005

Construction firms have asked the government to review its policy on imported labour from neighbouring countries and extend work permits to offset a serious labour shortage, an industry expert said on Friday.

Jaroon Janjamratsaeng, president of construction firm Benjamad Group, said shortages of labour and the rising cost of raw materials were the main problems affecting the industry.

He added that the government move to limit the number of workers from neighbouring countries such as Burma, Laos, and Cambodia, had had a direct impact on building firms.

Labourers from those three countries now make up 80 per cent of the companies’ total workforce. About 1.2 million foreigners are employed in the construction industry.

Due to the government policy requiring registration of foreign workers and their having to renew employment contracts each year, it is difficult for firms to replace employees who failed to register with the Labour Department.

Jaroon said that up to 500,000 unregistered immigrants worked in the construction industry.

“If the government fails to resolve the labour problem, many construction developments, including the government’s Bt170-billion mega-projects, will suffer labour shortages, which would delay their completion,” he added.

Meanwhile, the cost of raw materials for the industry increased between 10 per cent to 30 per cent between December and April – in particular, sand, cement and gravel.

The increase was due to higher transportation costs brought on by rising oil prices.

However, the steel-rod price fell from Bt21,000 per tonne at the end of last year to Bt16,000 per tonne as global demand dropped. Even so, this is expected to rise to Bt18,000 per tonne because local demand will pick up when the major government projects start, Jaroon said.

Higher costs for raw materials may force companies to shelve or scrap some projects, especially small government-sponsored projects in the provinces. So far this year, constructors have abandoned projects totalling Bt300 million.

“The government has to adjust its bidding price [middle price] before projects are auctioned to take into account the higher cost of raw materials,” Jaroon added.

Somluck Srimalee

The Nation

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