The South African construction industry is facing a potential collapse due to shrinking margins, unfair practices, and rampant delays or outright refusal to pay subcontractors.
Past president of MBA North, Nico Maas of Gauteng Piling, said that his company has lost over R9 million in income in recent years, with outstanding debt of R11 million because of non-payment. “We are a small company with 22 permanent employees our very survival is threatened,” said Maas. However, Neil Duncan, chair of the MBA North Sub-contractor sub-committee, said that “this is not just a sub-contractor problem – it’s an industry problem.”
Maas suggests that retention monies in all forms can be paid into this fund, even retentions being withheld by client bodies on main contractors as it “will safeguard the main contractors should the client go out of business, which has also been happening more and more lately.”Former CEO of the Joint Building Contracts Committee, Uwe Putlitz, identifies contracts and a lack of best practice as key factors influencing these challenges.