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


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

A list of suspended contractors has been published on the CIDB’s website, and a number of successful prosecutions have taken place, and fines have also been handed out, says CIDB CEO Ronnie Khoza in an interview with Engineering News.


He adds that two CIDB employees have been dismissed for accepting bribes, while others are being investigated.


Suspended contractors will be publicly named, and their details will be published in the Government Gazette, which will, hopefully, act as a deterrent to contractors considering resorting to fraud.


The CIDB has an external investigations company assisting it with forensic investigations into suspected fraudulent activities, and details are then passed on to an independent CIDB committee, which considers the evidence and, with the help of an attorney, makes a decision on the action 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 says.

“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,” says Khoza.


He explains that awarding tenders to contactors that are not capable of, or under-qualified for, the job undermines the register of contractors, which was established as a risk-mitigating instrument to assist public-sector clients in selecting 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 are some of the reasons why government set up the register in 2004, effectively ensuring that contractors that are awarded projects have the ability to deliver.


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

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


The CIDB has established an anonymous fraud reporting hotline (0800 112 452), where 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 for and the duration of the sus-pension can be found on the CIDB website, or on www.engineeringnews.co.za.

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