Govt late payments threaten beleaguered industry
One of the biggest challenges facing the beleaguered South African building industry is late payments for projects – particularly by government departments and enterprises, says Prof Tinus Martiz, head of the department of Construction Economics, and chairman of the School for the Built Environment at the University of Pretoria.
He said late payments were severely hurting an industry already facing several major challenges – particularly smaller and emerging contractors.
“It is worrying that regulations mooted by MBSA and submitted to the National Department of Public Works (NDPW) by the CIDB for promulgation have, nearly four years after being drafted, not yet been acted upon,” he stated.
“The draft regulations address some of the major causes of late payments, contractual issues and disputes, as well as the rights and obligations of each party. They also seek solutions to mitigate lengthy court battles and work on the premise that if all parties understand project requirements, there will be fewer disputes. We also need set standards of uniformity and standard documentation to ensure everyone understands the contents of a contract.”
He said this would increase cost efficiencies, provide uniformity in procurement and make tendering easier and more precise. He urged all parties, including MBSA, to maintain pressure on regulators to fast-track the proposed legislation, especially relating to prompt payment protection and adjudication of disputes.
More information from Palesa Khambi, Tel: +27(0)11 805 6611 / www.mbanorth.co.za