Delayed payments challenge contracting sector: CIDB report
The 2014 CIDB report on Construction Industry Indicators (CIIs), found that infrastructure clients were dissatisfied with ±16% of the work carried out by contractors, while around 18% of projects surveyed had “inappropriate” levels of defects.
“Client dissatisfaction stems from appointing a contractor who is unsuitable for the work. CIDB feels that the bidder’s technical capacity and ability to execute a contract should be seriously considered when evaluating government tenders,” CIDB CEO Mzwandile Sokupa said.
While 85% of South Africa’s construction tenders were evaluated in terms of functionality, the government’s Tender Committee recommendations were overruled in awarding ±12% of public sector projects – this being highest in Limpopo.
Contractors on 20% of projects were dissatisfied with clients in terms of the quality of tender documents and specifications, management of variation orders and delayed payments.
“Only ±40% of payments to contractors were made within 30 days after invoicing.
Delayed payments are one of the biggest challenges facing the contracting sector and, in particular, the small and medium-sized contractors – which often results in bankruptcy,” Sokupa said.