South Africa’s renewed drive to improve accountability in public infrastructure delivery has received a significant boost following the government’s decision to blacklist 52 construction companies for poor performance and corruption. The move signals a stronger commitment to improving project delivery standards, restoring confidence in public procurement and ensuring infrastructure investments deliver lasting value.
While stricter enforcement is an important step, industry experts argue that preventing future project failures requires more than simply removing underperforming contractors from the market. Strengthening risk management before projects begin is equally critical.
According to Oren Zukerman, Head of Construction Guarantees at Credeq Africa, underwriting can play a vital role in supporting government efforts by providing an independent assessment of a contractor’s ability to successfully deliver projects.
Rather than focusing solely on financial statements, modern underwriting evaluates several factors, including a contractor’s operational capacity, project delivery history, financial strength, business practices, management capability and current workload. This broader assessment helps identify potential delivery risks before contracts are awarded.
Construction guarantees issued by licensed financial service providers also provide additional security for project owners. While guarantee wording from banks and insurers offers similar protection, insurance-backed guarantees typically include a comprehensive review of the contractor’s overall ability to perform under real project conditions.
Industry specialists believe this additional layer of due diligence strengthens procurement processes by ensuring that only capable and financially stable contractors are entrusted with major infrastructure projects. It also supports greater accountability throughout the project lifecycle rather than only during the tender evaluation stage.
As South Africa accelerates investment in infrastructure to stimulate economic growth and create jobs, improving contractor oversight has become increasingly important. Ongoing project monitoring, stronger due diligence and appropriately structured guarantees can help reduce project failures, cost overruns and delays.
An underwriting-led approach can also assist in identifying hidden risks, including contractors operating through newly established entities or shell companies designed to bypass procurement restrictions. By examining ownership structures, financial behaviour and historical performance, underwriters can uncover warning signs that traditional procurement assessments may overlook.
Industry experts believe closer collaboration between the public and private sectors could further strengthen infrastructure delivery. Sharing underwriting expertise, project monitoring capabilities and industry insights can improve contractor selection, enhance risk management and increase the likelihood of projects being completed on time, within budget and to the required quality standards.
As South Africa continues to expand its infrastructure programme, integrating underwriting into the project lifecycle could become an important tool for improving project outcomes, protecting public investment and ensuring sustainable development across the country’s construction sector.
