Monday, 25 April 2016: The Construction Industry Development Board (cidb) Prompt Payment Regulations are expected to profoundly change the way the South African construction industry operates and will govern construction works in both the public and private sectors. The proposed regulations appeared in the Government Gazette on 29 May 2015 (in Notice 482 of 2015) for public comment by the end of July 2015 and are expected to be implemented shortly.
These regulations introduce adjudication as a mandatory first step for resolution of disputes in both the public and private sectors. Given that the building and civil engineering industries experience major problems related to non-payment of contractors and sub-contractors, the regulations are expected to have a positive effect on effective infrastructure development by ensuring better cash flow.
According to Vaughan Hattingh, director and specialist adjudication practitioner with MDA Consulting, the new regulations will have profound consequences for the SA construction industry. “These regulations mean that payments cannot be withheld without going through a defined procedure. They give contractors a statutory right to suspend works and to charge interest on late payments. The regulations also introduce a form of statutory adjudication to resolve disputes,” he says.
Hattingh will be speaking on the new regulations at Totally Concrete at Gallagher Estate on 9 May 2016.
The local construction industry has questioned whether there are sufficiently qualified and competent adjudicators and whether adjudicators’ decisions will be enforceable.
Hattingh therefore helped to develop a course and course material for a certificate programme in Construction Adjudication at the Centre for Continuing Education at the University of Pretoria.
Industry, legal practitioners and especially contractors and subcontractors have welcomed adjudication as an effective means of resolving payment disputes in other countries that have adopted similar legislation. ENDS
For interviews, photographs or further information, please contact Despina Harito at Turquoise PR & Marketing Communications on despina@turquoisepr.co.za or 011 452 1840 / 084 453 1755.
About MDA Consulting
MDA Consulting is a specialist commercial advisory practice in the construction environment. Its services include legal advisory solutions to contracting organisations including infrastructure, mining, petrochemical, water processing, energy and engineering sectors within southern Africa and internationally. MDA Consulting also offers commercial training, dispute management and resolution and contract documentation support.
www.mdaconsulting.co.za
