Prompt payment regulations a relief for the construction industry

02 June 2015

New proposed regulations governing payments and dispute management under construction works contracts are expected to profoundly change the way the South African construction industry operates.

The Construction Industry Development Board (cidb) Prompt Payment Regulations and Adjudication Standard appeared on Friday 29 May 2015 in the Government Gazette Notice 482 of 2015 and are open for public comment for the next 60 days.

These regulations address a crippling constraint to effective infrastructure development by introducing processes to ensure the life blood of the industry, cash flow, actually flows.

They legislate a standard set of payment provisions and introduce adjudication as a mandatory first step for resolution of disputes in both the public and private sectors.

In summary, the Construction Industry Development Board (cidb) prompt payment regulations:
•prohibit ‘pay-when-paid’ clauses
•insist on regular payments within a defined time frame
•allow suspension of construction activities
•prohibit withholding of payment
•entitle a party to charge interest on late payments
•introduce a mandatory statutory form of adjudication which is a fair, rapid and inexpensive mechanism for resolving disputes.

More information from Michelle Blumenau, Tel:+27(0)11 728 5004/mobile:083 273 9891/[email protected]

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