South Africa’s Construction Industry Development Board (CIDB) has openly named contractors that it has suspended from its register for fraud, as the organisation took a tough stance on “unscrupulous contractors”.

Established as the construction industry regulator assisting the public sector, the CIDB’s anti-corruption campaign took a hard line in 2008, and it was now suspending fraudulent contractors from its register. This effectively barred corrupt contractors from receiving government tenders for construction.

A list of suspended contractors was published on the CIDB’s website, and a number of successful prosecutions have taken place, as well as fines handed out, said CIDB CEO Ronnie Khoza in an interview with Engineering News Online.

He added that two CIDB employees have been dismissed for accepting bribes and others were being investigated.

Suspended contractors would be publicly named, and their details would be published in the government gazette, which would hopefully act as a deterrent to contractors considering resorting to fraud.

The CIDB had an external investigations company assisting it with forensic investigations into suspected fraudulent activities, and details were then passed on to an independent CIDB committee, which considered the evidence, and with the help of an attorney, made a decision on what action was to be taken.

“Government departments, municipalities and public entities may not award tenders to contractors that are not registered with the CIDB, according to the CIDB Act 38 of 2000 and the Construction Industry Regulations of 2004,” the board said.

“Unscrupulous contractors are increasingly resorting to bribery, fraud and corruption to by-pass CIDB requirements for registration, especially in higher grades, in a bid to land bigger construction projects from government,” said Khoza.

He explained that awarding tenders to contractors that were not capable, or under-qualified for the job undermined the Register of Contractors, which was established as a risk mitigating instrument to assist public sector clients to select capable contractors to deliver public infrastructure.

The register grades and categorises contractors from levels one to nine, according to their capability to carry out construction projects. Poor delivery and quality of work as well as escalating costs of project failure were part of the reasons why government set up the register in 2004, effectively ensuring that contractors that are awarded projects, have the capability to deliver.

The risks on project sites, with regard to health and safety standards, and quality control were also important. “People must not be given projects they cannot handle,” reiterated Khoza.

“We have a responsibility to protect the integrity of infrastructure and cannot allow the actions of a few unscrupulous individuals to undermine current achievements in making the register an effective risk management tool,” affirmed Khoza.

The register was divided into categories, namely: general building; civil engineering; electrical engineering; and mechanical engineering, although companies could often register under more than one category. Fraud tended to be most prevalent in the general building (construction of classrooms, clinics and hospitals for example) and civil engineering categories, noted Khoza.

The CIDB has established an anonymous fraud reporting hotline (0800 112 452), where the staff and the public can report suspected fraud and corruption. The hotline is managed independently by external experts.

A list of 21 suspended contractors, with the reasons and time period of the suspension could be found on the CIDB website, or accessed through the document attached alongside this article.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.