{"id":854215,"date":"2026-03-30T13:00:00","date_gmt":"2026-03-30T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=854215"},"modified":"2026-03-30T12:47:54","modified_gmt":"2026-03-30T10:47:54","slug":"one-of-the-largest-employers-in-south-africa-getting-crushed","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/854215\/one-of-the-largest-employers-in-south-africa-getting-crushed\/","title":{"rendered":"One of the largest employers in South Africa getting crushed"},"content":{"rendered":"\n

Late payments by the government are choking the life out of South Africa\u2019s construction sector, one of South Africa\u2019s largest employers.<\/p>\n\n\n\n

This is the feedback from Euan Massey, director at construction experts MDA Attorneys, who said contractors are increasingly being forced to finance projects out of their own pockets\u2014threatening their survival.<\/p>\n\n\n\n

According to a report published by the International Labour Organisation, South Africa\u2019s construction sector employs approximately 1.2 million people across the country.<\/p>\n\n\n\n

The National Treasury\u2019s latest payment data points to a worsening late payment crisis across national and provincial government departments.<\/p>\n\n\n\n

At the end of the second quarter of 2025, 95,399 invoices older than 30 days, totalling R12.4 billion, remained unpaid.<\/p>\n\n\n\n

Massey said the problem has become severe across the construction industry, particularly in the public sector, where there is widespread non-compliance with existing legislation requiring payment within 30 days.<\/p>\n\n\n\n

\u201cIt\u2019s a real problem. We\u2019re at the coalface of a number of these particular payment issues. There\u2019s legislation in place, but unfortunately, particularly in the public sector, there\u2019s large amount of non-compliance,\u201d said Massey.<\/p>\n\n\n\n

As a result, contractors are often left to fend for themselves when it comes to collecting what they are owed. <\/p>\n\n\n\n

\u201cContractors are really left to their own devices to collect money, and to be innovative in doing that,\u201d Massey said.<\/p>\n\n\n\n

He warned that the situation is having a profound impact, especially on smaller firms that lack the financial capacity to carry projects for extended periods.<\/p>\n\n\n\n

He blamed the ongoing delays largely on inefficiencies within government departments.<\/p>\n\n\n\n

\u201cI just think it\u2019s largely incompetence. Payments in a number of government departments just don\u2019t take place within these periods of time,\u201d he said.<\/p>\n\n\n\n

The practical implications for contractors are severe. Massey explained that when payments are delayed, companies struggle to keep projects running.<\/p>\n\n\n\n

\u201cWhilst you\u2019re busy with the project that you\u2019re executing, you can\u2019t buy materials, you can\u2019t pay your subcontractors, you can\u2019t pay your labour in some instances, and that brings these projects to a grinding halt,\u201d he said.<\/p>\n\n\n\n

This has contributed to the slow pace of infrastructure delivery in the country, with projects dragging on for years or even decades.<\/p>\n\n\n\n

Quality also suffers <\/h2>\n\n\n
\n
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Euan Massey, director at construction experts MDA Attorneys<\/em><\/figcaption><\/figure><\/div>\n\n\n

While safety standards are generally maintained, Massey warned that quality can suffer when contractors are under financial strain. <\/p>\n\n\n\n

\u201cMost contractors would not compromise safety, but most certainly on quality. When people aren\u2019t paid, the quality does drop off,\u201d he said.<\/p>\n\n\n\n

He added that the current situation effectively forces contractors to bankroll public infrastructure\u2014something he described as untenable.<\/p>\n\n\n\n

Despite these challenges, contractors continue to bid for government work, largely because of the need to sustain their businesses. <\/p>\n\n\n\n

\u201cYou\u2019re making some money on some [projects] and losing on others, and hopefully, in the balance, everything\u2019s going to be okay,\u201d he explained.<\/p>\n\n\n\n

Massey also highlighted structural changes in the industry, including the growing use of EPC (engineering, procurement and construction) contracts, which place greater responsibility and risk on contractors.<\/p>\n\n\n\n

While effective and \u201cbankable,\u201d particularly for private-sector projects like renewable energy, he said local firms have sometimes underestimated the risks involved, \u201cwith fairly severe consequences.\u201d<\/p>\n\n\n\n

At the same time, increasing competition from international firms is adding further pressure. <\/p>\n\n\n\n

\u201cThere\u2019s increased international competition, particularly from China, Europe, and India,\u201d he said, and noted that the government often appears to favour foreign contractors over developing local capacity.<\/p>\n\n\n\n

To stabilise the sector and support the government\u2019s infrastructure ambitions, Massey called for urgent reform, particularly of payment systems.<\/p>\n\n\n\n

He pointed to previously proposed \u201cPrompt Payment regulations\u201d as a potential solution. These would enforce strict payment timelines and introduce fast-track dispute resolution mechanisms.<\/p>\n\n\n\n

\u201cSomething along those lines would need to be introduced. We\u2019ve seen it in a number of other countries, and it works with great success,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Late payments by the government are choking the life out of one of South Africa\u2019s largest employers.<\/p>\n","protected":false},"author":92,"featured_media":854224,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[25033,25034,3796,853],"class_list":["post-854215","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-contruction","tag-mda-attorneys","tag-national-treasury","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854215","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=854215"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854215\/revisions"}],"predecessor-version":[{"id":854266,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/854215\/revisions\/854266"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/854224"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=854215"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=854215"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=854215"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}