ABU DHABI // More than 400 employees on a Reem Island construction site have stopped work on a Dh7billion development nearly three months after they were last paid their monthly salary.
The labourers began the strike on Monday, stalling work on the Tameer Towers project on the 6.5million square-metre island.
The development, a four-building project that is part of the Shams Abu Dhabi development, includes residential and commercial space and a five-star hotel. The first homes are expected to be handed over by the beginning of 2013.
The contractor on the project, Al Rajhi Projects, last paid the workers in April.
A Ministry of Labour official visited the Tameer Towers site last week and ordered Al Rajhi to pay its workers.
The company pledged to pay May's salary by today and June's by the end of this month.
An official said the ministry would follow up with the company to ensure that they have paid their workers.
A representative for Al Rajhi was not available for comment.
Tameer Holding Investment LLC, the project's developer, said it had no cash-flow problem.
"From our side, all Tameer employees working on the project have no payment issue," a spokesman said.
John Zwets, Tameer's chief development officer, said he expected work to resume on the site today.
"When we learnt of the unfortunate circumstances going on at the Tameer Towers site, we contacted Al Rajhi Projects, and we were led to believe that the wages were paid," Mr Zwets said.
Al Rajhi Projects is the UAE construction arm of Al Rajhi Holding Group, a Saudi Arabian company. Al Rajhi Holding Group is also the majority owner of Tameer Holding Investment.
Sorouh Real Estate, the master developer of Shams Abu Dhabi, was initially a partner with Tameer on the Towers project but dissolved their joint venture in 2009.
A Sorouh spokesman confirmed the developer was no longer connected to Tameer on the project.
Construction on the project, which began in 2007, has faced significant delays.
The residential phase was meant to be delivered last month, but the most developed part - Tower A - has only 11 of its projected 69 floors completed. The project's latest status report, in March, expected 21 floors to be built by this month.
Workers on the site said they had never before experienced a problem with their pay, but changes at the site this year raised alarm bells.
"Six months ago there were thousands of workers and everything ran smoothly," said one worker.
"Then something went wrong with the company, and they cut the labourers, and then we received no salary."
Mr Zwets said it was normal for the number of labourers on a site to shift as the nature of the work changes.
"We are still working in accordance with our master programme," he said. "Of course, we've seen some changes over the past few months … and we've made some modifications, including some to our time schedule."
Another worker, an Egyptian, said he was told the economic conditions were to blame for the labour cutbacks and money troubles.
"Many companies are having this problem," he said.
"They should be giving respect to the workers," said another labourer.
"If the company cannot provide good salaries and good accommodation, I have to think about going home. I have no savings." The worker, a 32-year-old from Nepal, said Al Rajhi had taken his passport and he had been working on the project without pay.
Middle managers are also believed to be waiting for back pay.
According to the Ministry of Labour, workers who do not receive their pay for more than 60 days are entitled to transfer to another establishment without permission from their employer.
"How can I leave? They have my passport, and I have no money," said one worker, whose salary is Dh1,300 a month. "I have to come to work."
Withholding employees' passports is illegal and a Ministry of Labour official said Al Rajhi could be referred to the courts if it does not pay its workers. The fine for withholding salaries is Dh10,000 for each worker.
Tameer is also working on landmark projects such as Princess Tower in Dubai, which will be the tallest residential tower in the world when it is completed in January.
Reem Island is a Dh30bn development about 600 metres off the coast of Abu Dhabi. The natural island is being developed by three master developers.
Tamouh Investments is responsible for 60 per cent, Sorouh 20 per cent and Al Reem Investments the remaining 20 per cent. When completed, the island is expected to house 200,000 people.
So far, two projects have begun to hand over properties to residents.