Close Menu
    • ABOUT
    • BOOK STORE
    • ENTREPRENEURSHIP
    • ESG
    • EVENTS & AWARDS
    • POLITICS
    • GADGETS
    • CONTACT
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    Business explainer
    Wednesday, October 28
    • TRENDING
    • EXECUTIVES
    • COMPANIES
    • STARTUPS
    • GLOBAL
    • AGRICULTURE
    • DEALS
    • Ai
    • ECONOMY
    • MOTORING
    • TECHNOLOGY
    Business explainer
    Home » Government Late Payments Threaten Plans to ‘Turn SA into a Construction Site’
    ECONOMY

    Government Late Payments Threaten Plans to ‘Turn SA into a Construction Site’

    September 10, 20263 Mins Read
    Share Facebook Twitter Pinterest Copy Link LinkedIn Tumblr Email Telegram WhatsApp
    Follow Us
    Google News
    Michelle Kerr, Director: MDA Attorneys
    Share
    Facebook Twitter LinkedIn Email Copy Link

    There is a growing contradiction between South Africa’s infrastructure ambitions and the way the construction industry is financed, according to construction law specialist MDA Attorneys.

    President Cyril Ramaphosa and the Minister of Public Works and Infrastructure, Dean Macpherson, have called for South Africa to become a construction site. According to the Construction Industry Development Board (CIDB), they intend to create jobs, empower 

    contractors, and breathe life into the country’s construction economy.

    Michelle Kerr, director at MDA Attorneys, says, “It’s a laudable goal, but the reality for South African contractors is that they often become the unwitting financier of the construction project through late payments by the project initiators,” says Kerr. “Delayed payments have become normalised, particularly in the public sector.”

    Government’s delay in paying invoices has recently made headlines, with Public Service Commissioner Anele Gxoyiya attributing the persistent non-payment to structural weaknesses, including a lack of consequences.

    National Treasury’s latest figures show that by the end of the third quarter of 2025/26, national and provincial departments owed a total R15.5 billion across 90,856 invoices unpaid for more than 30 days across various sectors. The Department of Public Works and Infrastructure, the very department leading government’s infrastructure push, was among the worst offenders.

    Cash-flow problem 

    Kerr says late payment is a key stumbling block for the construction sector. “Construction is cash-flow dependent. The contractor pays wages, suppliers, subcontractors, plant and often materials before recovering those costs through interim payments. When an employer does not pay or pays late, contractors lower on the chain effectively carry the financing costs of the project.”

    Large contractors with substantial working-capital facilities may be able to absorb this for a period, but smaller contractors struggle. “Subcontractors go unpaid. Projects slow down. Claims proliferate. Many businesses fail,” says Kerr.

    Employers do not escape the consequences, she notes. Contractors price payment risk into their tenders, driving up the cost of future projects, while the pool of contractors capable of delivering shrinks.

    Waiting too long

    Kerr says contractors frequently compound the problem by treating payment as a purely commercial issue for too long. “They continue working, sending increasingly frustrated emails, attending meetings and accepting promises that payment is ‘being processed’, while failing to use the contractual machinery available to them.”

    The response to non-payment should begin with the contract itself, she advises. The GCC, JBCC, NEC and FIDIC forms of contract all set out processes for dealing with non-payment. Depending on the contract, non-payment may trigger rights to interest, suspension and, in sufficiently serious cases, termination — though each form carries its own procedural requirements and notice provisions that must be properly complied with to secure these entitlements.

    Parallel to these contractual processes, contractors also have recourse to court proceedings to enforce payment of amounts certified in a payment certificate, says Kerr.

    Follow on Google News
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email Copy Link WhatsApp

    Related Posts

    Industry Experts Comment on Godongwana’s Mini Budget Speech

    October 21, 2026

    Fuel Relief and Falling Debt Anchor Godongwana’s Mid-Term Budget

    October 21, 2026

    Who Employs the Workforce? The Changing Business Model Reshaping Construction

    October 21, 2026

    2027 Medical Scheme Outlook

    October 21, 2026
    Top Posts

    Absa Launches Grant Fund to Back Young Entrepreneurs

    July 26, 20263,335

    Old Mutual Shareholders Reject CEO Pay Plan

    July 16, 20263,220

    PIC Board Suspends Its CEO

    July 13, 20262,903

    Avatar Confirms Ngubane’s Abrupt Exit as Co-Chief Creative Officer

    July 22, 20262,563
    Don't Miss

    Gas Regulator Maseti Takes the Helm at Nersa

    October 27, 2026 APPOINTMENTS

    The National Energy Regulator of South Africa (Nersa) has appointed Nomfundo Maseti as acting CEO.…

    PPC Offloads Idle Zimbabwe Estate for $27m

    October 27, 2026

    Idris Elba’s Launches Free AI Filmmaking Programme for African Creators

    October 27, 2026

    Chery to Build Omoda Hybrid at Rosslyn from 2027

    October 21, 2026
    Stay In Touch
    • Twitter
    • LinkedIn
    • Facebook

    Business Explainer proudly displays the “FAIR” stamp of the Press Council of South Africa, indicating our commitment to adhere to the Code of Ethics for Print and online media which prescribes that our reportage is truthful, accurate and fair. Should you wish to lodge a complaint about our news coverage, please lodge a complaint on the Press Council’s website, www.presscouncil.org.za or email the complaint to khanyim@presscouncilsa.org.za Contact the Press Council on 011 4843612.

    Facebook X (Twitter) LinkedIn
    Categories
    • TRENDING
    • EXECUTIVES
    • COMPANIES
    • STARTUPS
    • GLOBAL
    • AGRICULTURE
    • DEALS
    • Ai
    • ECONOMY
    • MOTORING
    • TECHNOLOGY
    contact us
    • Get In Touch
    Facebook X (Twitter)
    • Privacy Policy
    © 2026 Business Explainer .

    Type above and press Enter to search. Press Esc to cancel.