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CONSTRUCTION projects are complex and risky. For this reason, the viability of the industry requires forms of securities, including on-demand bonds, says Kelly Stannard of MDA Attorneys.

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Recently SA’s credit rating was downgraded by two rating agencies. MDA Director, Chris Bennett, talks to eNCA correspondent Duduzile Ramela, about the possible impact on the construction industry.

Different contractual arrangements for construction contracts require different dispute resolution processes. This is therefore not a “one size fits all” situation.

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Why are so many construction contracts in SA over budget, late and being carried out at the expense of good relationships between the parties? Ian Massey, MDA Director, believes that polarisation in the construction industry is at the root of the problem.

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MDA Director, Euan Massey, talks to eNCA’s Motheo Kgoripe, about the need for more trained adjudicators in South Africa.

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With the implementation of the Prompt Payment Regulation and Adjudication Standard for construction contracts imminent, MDA Attorneys laments the lack of adjudicators in the industry to deal with disputes. `The proposed regulations require that all dispute…

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This type of security- for-payment regulation that regulates aspects of the payment processes and also introduces a system of statutory adjudication as a mandatory first step in the dispute resolution process on construction projects is important for the sustainable development of the construction industry in SA, according to Vaughan Hattingh, Director and specialist adjudication practitioner with MDA Attorneys.

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Chris Bennett, MDA Director, talks to CNBC Africa’s Guguletu Cele, on the growing rate of liquidations in the construction industry. Contractors and sub-contractors are warned that payments can be clawed back from them if their contracting counter-party winds up in liquidation.

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As bankruptcies of contactors in the construction industry rise at a rate of five liquidations a month, contractors and subcontractors are being warned that payments can be clawed back from them if their contracting counter-party winds up in liquidation.

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Ian Massey, Director, says that there are four ways to ensure the satisfactory outcome of any construction contract.


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Vaughan Hattingh, Director and adjudication practitioner with MDA, says: “For several years, South African courts have supported the adjudication procedure by implementing a robust approach in enforcing adjudicators’ decisions repeatedly.

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Vaughan Hattingh, Director and adjudication practitioner with MDA, says that adjudication has been implemented by the South African construction industry for many years as the preferred dispute resolution procedure.  He explains that enforcement of the adjudicator’s decision is critical to the success of the prompt payment regulations.

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Vaughan Hattingh, Director and adjudication practitioner with MDA, says there are many lessons from Malaysia as well as the UK, Singapore and Hong Kong, that can be applied in South Africa. “The SA regulations are well crafted and the development of alternative dispute resolution will assist the construction industry to grow by providing binding guiding principles accepted by individuals, corporations and state-owned entities,” he said.

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Vaughan Hattingh, Director and adjudication practitioner with MDA, says: “The proposed regulations prevent withholding of payments without going through a defined procedure. They give contractors a statutory right to suspend works, to charge interest on late payments and they introduce a mandatory form of statutory adjudication to resolve disputes.”

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According to Vaughan Hattingh, Director and adjudication practitioner with MDA, “Delayed payment has a destructive effect on the sustainable development of the construction industry. The proposed regulations prevent withholding of payments without going through a defined procedure. They give contractors a statutory right to suspend works, to charge interest on late payments and they introduce a mandatory form of statutory adjudication to resolve disputes.”

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“The new regulations will compel parties to resolve disputes through adjudication within 28 days. Importantly, the 28-day window may only be extended by 14 days in prescribed circumstances,” explained MDA Director and adjudication practitioner Euan Massey.

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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 step for resolution of disputes in both the public and private sectors. Home building contracts, as contemplated by the Housing Consumer Protection Act 1998 (Act No. 95 of 1 998), are however excluded from application of the regulations.

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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 DevelopmentBoard (CIDB) Prompt Payment Regulationsand Adjudication Standard recently appeared in the Government Gazette Notice 482 of2015 and was open for public comment for 6O days.

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

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“The new regulations will compel parties to resolve disputes through adjudication within 28 days. Importantly, the 28-day window may only be extended by 14 days in prescribed circumstances,” explained MDA Director and adjudication practitioner Euan Massey.

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According to Vaughan Hattingh, Director and adjudication practitioner with MDA, “Delayed payment has a destructive effect on the sustainable development of the construction industry. The proposed regulations prevent withholding of payments without going through a defined procedure. They give contractors a statutory right to suspend works, to charge interest on late payments and they introduce a mandatory form of statutory adjudication to resolve disputes.”

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Nuwe voorgestelde regulasies om die chroniese wan betalings in die Suid-Afrikaanse konstruksie bedryfte bekamp, is einde Verlede week gepubliseer. Die Boubedryf-ontwikkelingsraad (BOR) het die regulasies.

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The Construction Industry Development Board Prompt Payment Regulations are expected to profoundly change the way the South African construction industry operates and will govern construction works in the public and private sectors.

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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.

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State-owned companies, often criticised by big contractors for being tardy in settling debts, want to be exempted from proposed construction sector regulations that will rein inerrant payers.The regulations, tabled in May, are designed to speed up the time it takes for contractors to be paid for construction projects.

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