REVIEW : South Africa's construction industry has declined significantly.

The construction industry's decline in South Africa is rooted in flawed procurement policies. These policies fail to establish an environment supportive of long-term, profitable business practices. The most critical element to any company’s success is profitability. Without profits, there’s no future for any business.

The construction industry is on the brink of a crisis, and urgent reforms are needed to save it, says Roelof van den Berg, CEO of the Gap Infrastructure Corporation. He identifies the current procurement policies as the root of the problem.

One major issue is the danger of competitive bidding. In a market with slim profit margins, companies are forced to slash their prices to stay afloat. This can lead to unsustainable practices, such as cutting corners on safety and quality.

Another problem is the way that tenders are managed. Clients often set unrealistic and inadequate budgets, which leads to projects going through multiple contractors and cost overruns of up to 120%. This can bankrupt contractors and subcontractors, and it has a devastating impact on the entire industry.

Van den Berg concludes that the construction industry needs a complete overhaul of its procurement and policy frameworks. He calls for thoughtful reforms and a shift towards fair and realistic project management practices. Only then can the industry be restored to its former glory and play its critical role in the country's economic development.

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