The South African government's crackdown on construction firms has led to the blacklisting of 13 additional companies by the Construction Industry Development Board (CIDB). This brings the total number of firms removed from the register to over 75 since mid-2024. The move is aimed at eliminating businesses that have misrepresented their fitness to undertake public infrastructure projects. Public works and infrastructure minister Dean Macpherson announced the development, stating that the department has intensified its efforts to root out errant firms since he took office in June 2024.
The 13 companies were struck off the register of contractors after investigations revealed misrepresentation in their applications to upgrade their registration grades. The CIDB's grading system assesses contractors based on their financial capability and track record, determining the value and complexity of projects they are qualified to undertake. The blacklisted firms held registration grades across various construction categories, ranging from grade 1 to grade 9. Minister Macpherson emphasized that the construction industry has been plagued by non-performance, misrepresentation, and a lack of consequences for those who fail to meet their obligations.
Minister Macpherson stated that public money has been wasted on projects that are delayed, abandoned, or poorly executed, while honest contractors have been forced to compete against those who manipulate the system. He noted that this has been a key focus area for the department over the last two years. The construction sector has been in a slump since the boom in the years before the 2010 Fifa World Cup hosted by South Africa. The sector's contribution to GDP has subsequently fallen to 2.4% in 2024 from 3.9% a decade earlier.
The construction industry has also faced challenges from the so-called construction mafia, which has disrupted multibillion-rand infrastructure projects countrywide. An official at Infrastructure South Africa recently identified structural challenges hampering the pace and efficiency of procurement and delivery. These include inadequate preparation, incomplete feasibility studies and business cases, limited institutional and technical capacity among implementing authorities, and funding or affordability constraints.
Business Leadership South Africa (BLSA) CEO Busi Mavuso has noted that the public sector is struggling to spend the infrastructure budget, with only one in six government tenders awarded in 2025. This is despite a budget of R1-trillion over the next three years announced by finance minister Enoch Godongwana in March 2025. The CIDB has responded by strengthening its verification processes and addressing non-compliance, including an audit of all graded companies to protect public funds and promote fair competition.
The CIDB's board chair, Khulile Nzo, emphasized that access to public procurement opportunities must be earned through genuine capability and compliance with the rules. He stated that it cannot be obtained through fraud, forgery, or misrepresentation, and that false information submitted to secure grading levels undermines the integrity of the register. This creates risks for infrastructure clients, disadvantages honest contractors, and weakens confidence in the procurement system.
The public works department is pushing for stricter enforcement of public sector clients' obligations to register construction projects with the CIDB. The department aims to ensure that contractors appointed by the state have the capacity to deliver projects. With the construction sector facing numerous challenges, the government's efforts to crack down on errant firms and promote fair competition are expected to have a positive impact on the industry.
Key points
- The Construction Industry Development Board has blacklisted 13 more firms for misrepresentation, bringing the total to over 75 since mid-2024.
- The South African government's crackdown on construction firms aims to eliminate businesses that have misrepresented their fitness to undertake public infrastructure projects.
- The construction sector has faced challenges from the so-called construction mafia and has struggled with a slump in the industry since the boom in the years before the 2010 Fifa World Cup.
