MBSA Payment Quality Survey Findings

Master Builders South Africa recently embarked upon a payment quality survey, and has for our benefit, submitted a detailed report with respect to its findings.

The survey which included members of Master Builders KwaZulu-Natal, was prompted by several indicating factors that contractors, suppliers and industry role players are, with more frequency, experiencing late payment and non-payment. This impacts directly on cash-flow, leaving many contractors unable to meet their financial obligations.

In the introduction to the report, MBSA make reference to the following two pieces of information, which inspired them to address the matter:

Firstly……

A snippet which featured in the March 2009 edition of SA Building:

“When market conditions change and become more challenging, bad practice rears its head. Clients at times through their Agents, will cause progress payments to be delayed to 60 days and beyond. More and more main contractors are subjecting their subcontractors to the same treatment – at times this even happens between Association Members! The public sector too has been sited as poor payers, particularly when it nears financial year end.

Attention has been drawn to the fact that cases have arisen where payment certificates have been issued, and have subsequently been adjusted to suit the cash flow of the client”    

Secondly…..

That the Construction Industry Indicators Survey for 2008 carried out by the Construction Industry Development Board (CIDB) showed that payment of contractors deteriorated from more than 80% paid in 30 days in 2005, to only 42% of payment made within 30 days in 2008.

The survey was carried out amongst Association Members throughout the country to ascertain the prevalence of such delays or non-payment, as well as the possible causes of the problem.

DOWNLOAD FULL REPORT (PDF)

Ernest Roper | Webmaster