Infrastructure South Africa (ISA) has raised concern about the high level of tender cancellations, which it believes is having a negative impact on the construction market, as well as on meeting the country’s goal of raising gross fixed capital formation (GFCF) to 30% of GDP.

ISA acting head Simphiwe Ndlovu told members of Parliament’s Select Committee on Public Infrastructure that a recent high-level analysis showed that more than 70% of the total number of advertised tenders had been either cancelled or closed.

Cancelled tenders were defined as those that had been advertised but subsequently cancelled before the closing date.

Closed tenders were those that had passed their closing date but were either still being evaluated, had been evaluated but no award had been made, or had been abandoned post-evaluation.

Of the 12 622 advertised tenders assessed – covering the categories of construction, construction of buildings, and specialised construction of buildings – only 29.89% had been awarded.

“In 2025, 2 549 tenders were advertised, of which only 16.98% were awarded,” Ndlovu revealed.

He also reported that a recent analysis of procurement data showed that only 39% of tenders advertised on the Chief Procurement Officer’s eTenders portal had been successfully awarded.

The analysis showed that Eskom had cancelled 159 tenders, followed closely by the Passenger Rail Agency of South Africa with 150, and Transnet with 129.

Other entities with significant cancellation figures included the Department of Water and Sanitation (96), the Road Accident Fund (80), and Public Works (69).

The data also revealed notable differences in performance across provinces, with the Western Cape leading with a 21% award rate in 2025, and Mpumalanga lagging with the lowest rate at just 5.8%.

Tender cancellations, Ndlovu said, not only harmed service delivery but also negatively impacted the construction sector.

Cancellations, he argued, reduce market confidence, result in less staff hiring, and have negative financial impacts owing to the time and money invested by companies in preparing tender documentation.

Small and medium-sized enterprises are not always able to absorb these costs, while the lack of projects could also lead to highly skilled professionals leaving the country, exacerbating the current skills shortage.

In his presentation to the committee, Public Works and Infrastructure Minister Dean Macpherson said he remained deeply worried by the fact that GFCF as a percentage of GDP continued to fall, despite the promised R1-trillion for public infrastructure over the coming three years.

ISA said GFCF stood at 13.71% of GDP in 2025, representing a major investment gap relative to the 30% target that had been set for 2030 in the National Development Plan.

He raised particular concern about the ability of local government to invest in large infrastructure projects, noting that hundreds of billions of rands were being returned to the National Treasury yearly owing to municipalities’ inability to plan, prepare, and execute infrastructure projects.

“We are addressing it through our flagship Presidential Adopt-a-Municipality Pilot Programme,” Macpherson said, describing the initiative as an innovation aimed at supporting municipalities to move stalled projects into implementation.