State Comptroller Slams Government Failures in Bringing Foreign Workers to Construction Sector

Israel’s State Comptroller Matanyahu Englman has issued a sharply critical report highlighting what he described as a serious operational failure by government ministries in addressing the labor shortage in the construction sector following the outbreak of the war in October 2023.

According to the report, delays in bringing in approximately 100,000 foreign workers—needed to replace tens of thousands of Palestinian laborers who stopped entering Israel after the war began—have caused billions of shekels in economic damage and significant delays in housing projects.

Bureaucracy and Lack of Coordination Cited

The comptroller pointed to excessive bureaucracy, poor inter-ministerial coordination, and prolonged delays in processing foreign workers abroad as central causes of the crisis.

The report specifically criticizes the Interior Ministry and the Population and Immigration Authority for failing to respond effectively, leaving thousands of construction sites understaffed for extended periods.

Industry Leaders Urge Immediate Action

In response to the report, Eldad Nitzan, chairman of the association representing foreign manpower corporations in the construction sector, called on the Minister of Housing, the Minister of Finance, and the Director-General of the Prime Minister’s Office to urgently adopt the report’s recommendations.

Nitzan urged the government to address what he described as a systemic operational failure within the Population and Immigration Authority, which he said began even before the war.

Partial Success Despite Structural Failures

Nitzan noted that despite severe shortages of resources and manpower, the construction division within the authority managed to facilitate the arrival of approximately 53,000 foreign workers over the past year—around 45,000 of them through private recruitment channels.

However, he argued that senior officials failed to adapt policies and procedures to the scale of the crisis, resulting in what he described as “a massive failure” that inflicted significant damage on both the economy and the construction industry.

Warnings Ignored Before the War

The report also raises questions about government preparedness prior to the war, including why authorities relied heavily on workers from a limited number of countries such as China and Moldova.

When the war began, China reportedly halted cooperation on sending additional workers, exacerbating the shortage.

The comptroller further highlighted concerns that the Finance Ministry resisted increasing quotas for foreign workers and continued to rely heavily on Palestinian labor, despite repeated warnings about the risks of such dependence.

Call for Structural Reform

Industry representatives are now calling for the establishment of a modern operational mechanism to rapidly bring in up to 100,000 foreign workers through private-sector channels, including more than 200 licensed manpower corporations established after October 7.

They argue that without immediate reforms—particularly within the Population and Immigration Authority—the construction sector will continue to face delays, rising costs, and reduced output.

Economic Impact Continues

The ongoing labor shortage has led to months-long delays in housing delivery and is expected to have long-term effects on Israel’s housing market and broader economy.

The comptroller’s report underscores the urgency of reforming the system, warning that failure to act could prolong the crisis and deepen its economic consequences.