Construction World July 2015

COMMENT

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In South Africa, but also elsewhere in the world, the practice where payment for construction projects is withheld from contractors due to employer budget constraints (the pay-when-paid practice); the link to performance; and only upon completion of a project (or even only until after disputes have been resolved) will soon come to an end.

The Construction Industry Development Board’s (cidb) Prompt Payment Regulations and Adju- dication Standard appeared in the Government Gazette on 29 May and is open for discussion for the next 60 days. These regulations will dramati- cally change the way in which the South African construction industry operates. The underlying reason for these regulations is to ensure that there is positive cash flow in the industry – this will obviously be beneficial for much needed infrastructure development. Without these regulations, and in the current status quo, contractors often end up financing projects. Or worse still: late payment has caused the demise of many companies – or led to severe financial constraints. These regulations legislate a standard set of payment provisions and introduce adjudication as a first step of dispute resolution – within 28 days (which may only be extended by 14 days – and only in certain circumstances). These regulations will only be applicable to the public and private sectors: home building contracts (protected by the Housing Consumer Protection Act of 1998) are excluded. In summary, these regulations seek to: (i) put an end to the ‘pay-when-paid’ practice, (ii) enforce regular payments within a certain time frame, (iii) allow for the suspension of construction activities if there is payment

default, (iv) stop the practice whereby clients can withhold payments, (v) allow the charging of interest on late payment and (vii) allow a rapid and mandatory form of dispute resolution with a specified timeframe.

Wilhelm du Plessis Editor @ConstWorldSA

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Sustainable supplement Construction World will be publishing its first supplement for sustainable construc- tion – Sustainable Construction World – in October this year. It will have the same circulation as the main magazine and also the same target audience. This is the ideal opportunity to publicise excel- lence in sustainability: projects, new prod- ucts, equipment and techniques. Contact me directly should you wish to discuss editorial contributions. It is also the ideal vehicle to reach the target audience that will use these very products, services and equipment. For advertising enquiries contact Erna Oosthuizen, our advertising manager, whose contact details are elsewhere on this page. Thedeadlineforadvertisingbookings is 31 July 2015.

EDITOR Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuisen ernao@crown.co.za LAYOUT & DESIGN Lesley Testa CIRCULATION Karen Smith

PUBLISHER Karen Grant PUBLISHED MONTHLY BY Crown Publications cc P O Box 140 BEDFORDVIEW, 2008 Tel: 27 11-622-4770 • Fax: 27 11-615-6108

TOTAL CIRCULATION: (First Quarter ’15) 4 698

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www.constructionworldmagazine.co.za

The views expressed in this publication are not necessarily those of the editor or the publisher.

CONSTRUCTION WORLD JULY 2015