Construction companies

Dubai Municipality has brought in new rules to improve conditions in labour camps, but industry figures have said they may have no choice but to pack workers into rooms if rents continue to hit budgets.

A room for four to six labourers that would have cost Dh700 to Dh800 in 2000 now costs around Dh6,000 in places such as Jebel Ali Free Zone. Over the last year alone, rents have risen by 40 per cent.

“This is absolutely disastrous for companies and labourers,” said the official, who wished not to be named. “A lot of building projects are either being cancelled or held back. Increasing costs of housing labourers is adding to the financial pressure on construction companies.

“Companies will have to crowd out rooms. If a room is only for six people, then companies will try and put seven or eight people in there. Eventually, it is the labourers who will feel the worst of it.” The rise in rents in part has been due to the wave of investors buying or building labour camps, and employing real estate agents to rent them out to companies.

According to Ani Ray, country manager for Simplex Infrastructure, it takes only two years for investors to recoup their initial expense.

“If you built a multi-storey building in Dubai Marina you wouldn’t even expect to get the same return,” he added.

In Abu Dhabi, the municipality has been building labour camps and then renting them out directly to construction companies, a system which Ray hopes will be adopted in Dubai.

“It’s a really good move,” he said. “Because companies can rent directly from the municipality, it cuts out the middleman.” The sentiment was also echoed by Aju Sharfuddin, HSE manager of Civilco, a construction company with labour camps in Dubai and Abu Dhabi.

Earlier in the year, Dubai Municipality issued a circular asserting that companies should provide at least 3.72 square metre of space for every labourer, as well as air-conditioned rooms.

The spokesman for Dubai Municipality was unavailable for comment.