Government’s plan to blacklist companies in South Africa
The Public Works Department plans to blacklist more companies in South Africa with a new national database that will name and ban contractors and consultants from doing business with the state who fail to deliver.
In September, the Public Works Department blacklisted 40 contractors for corruption and non-performance, the first time in 20 years.
The Public Works Department has blacklisted 40 contractors for corruption and non-performance this year, the first time in 20 years.
In 2002, only one company faced such action. Minister Dean Macpherson said that the department is improving its blacklisting procedures to recover misused public funds more efficiently.
In an interview, Macpherson explained that the government’s new plan to blacklist failing contractors is a direct response to the frustration that South Africans have carried for years as they watch public building projects stall or collapse.
“I feel the anger, and I’m as frustrated as any other South African is when they see a half-built project,” he said.
He said that every abandoned clinic or school reflects poor planning, budgets disappearing, and people not being held accountable.
As a result, Macpherson noted that his department has had to confront the systemic failure behind these problems. “We’ve sought to look at what the root causes are,” he said.
A central part of the department’s plan is to stop contractors who fail to deliver from simply moving to another province or government department for their next contract.
“Contractors cannot bounce around the country, ripping off the state, whether it be a province or nationally, and get away with it. And if you’re going to do that, you’re going to be blacklisted,” Macpherson said.
Macpherson described the initiative as a “decisive construction action plan” that aims to professionalise public works, ring-fence budgets, and bring digital transparency into the system.
The plan also requires all professionals working on state projects to be properly qualified and registered, ensuring that “what they say they can do, they are able to do.”
Asked why this overhaul took so long, Macpherson said the current administration needed time to understand the full extent of the dysfunction.
“It takes time to see what’s under the hood of the car and diagnose what needs to be done,” he said.
Individuals will also be targeted and listed
While he could not speak for past administrations, he argued that his team has now completed the research, benchmarking, and diagnosis needed to act.
Macpherson said the government has already begun enforcing consequences. “We’ve already blacklisted 40 [companies] just in the last 12 months,” he noted, contrasting that with “one company that was blacklisted in 22 years.”
He insisted this shows the department “means business”. He added that it should be an honour to do business with the state.
“Unfortunately, it’s seen as an opportunity to rip off the state. So I don’t care who you are or what membership card you carry.
“If your business doesn’t perform, you will be blacklisted and you won’t be able to operate anywhere,” the minister warned.
However, one challenge is that contractors often reappear under new names or shell companies.
Macpherson said provinces themselves raised this issue, and the solution was found in Limpopo, which created a “restriction committee” to track individuals and companies that fail to deliver.
“They get added to the restriction committee, and that then gets shared with municipalities and other spheres of the state,” he explained.
All provinces will now be required to establish these committees, which will feed data into a central database managed by the Construction Industry Development Board.
Once flagged, “no arm of the state can or should do business” with those individuals or firms, and Treasury will also receive the list.
Another pillar of the overhaul is budget protection. Macpherson said incomplete projects often result from provinces moving funds midway through construction.
“If you’re going to commit to a three-year budget on a project, you can’t pull that budget halfway through,” he said.
Macpherson noted that many stalled projects are 70 or 80% complete, but funding gets diverted because provinces face new pressures.
“That just can’t be allowed.” He added that the Auditor-General has been asked to audit not only Public Works, but also client departments that fail to pay on time or withhold allocated funds.
Macpherson acknowledged that enforcing ring-fenced budgets will require cooperation. However, he insisted there is a broad agreement within the public works departments across provinces.
“They’re going to go back to their treasuries, I’m going to go back to mine, and we’re going to lobby hard to get that institutionalised.”
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