The Construction Industry Development Board (CIDB) has initiated a formal investigation into suspected systemic fraud and incompetence linked to a series of failed provincial transport projects, following alarming revelations from the KwaZulu-Natal Department of Transport.
The probe, confirmed by CIDB CEO Bongani Dladla in an exclusive interview, centres on possible collusion and corruption involving contractors who may have fraudulently obtained high-grade competency certificates to win lucrative tenders for which they were unqualified. This comes directly after the provincial department, under MEC Sipho Hlomuka Duma, flagged concerns that numerous contractors with high CIDB grades were consistently missing deadlines on critical infrastructure projects.
The situation came to light publicly after MEC Duma highlighted that 30 projects were “considered to have failed,” with contractors suspected to be responsible. This prompted the CIDB to request the names of the contractors, details of the procurement processes, and client performance reports from the department.
“We reached out to the department to furnish us with the names of those contractors, the procurement process that was followed… and also the performance really of the client so we can investigate,” stated Dladla. He revealed this is part of an ongoing crackdown, noting that in July last year alone, the CIDB deregistered 40 companies for “similar actions where people are suspected to have bought the grades or are not performing.”
The Scale of the Problem and “Bought” Certificates
The investigation will scrutinize how companies allegedly obtained high-grade certificates illegally. Legally, contractors must prove a track record of completing similar projects, demonstrate financial capability, and show appropriate conduct. High grades for major transport projects would typically require a contractor to have a turnover of around R200 million and experience with projects above R60 million.
Dladla expressed grave concern over the economic impact, describing the cost as “quite severe.” Failed projects lead to re-tendering, costly restarts, and rampant price escalation. “We’ve seen projects that were supposed to be 50 million they end up being 110 million,” he said.
Internal Corruption and Zero-Tolerance Stance
The CEO acknowledged the scandal points to potential cracks within the CIDB’s own systems, suggesting the possible involvement of internal staff in the fraudulent sale of grades. He asserted a zero-tolerance approach, citing past instances where fraud was reported.
“We’ve dealt decisively… terminating employees [and] opening criminal cases,” Dladla said. The board maintains detailed records of who assesses each contractor’s file, which should, in theory, make it easier to identify and prosecute internal misconduct.
Broader Scrutiny and New Measures
Dladla emphasized the investigation would take a “360 view,” examining not only contractors but also client departments. He pointed to late payments and delayed decisions by officials as contributing factors to project failures. The CIDB is collaborating with the Auditor-General and law enforcement, including the SAPS and NPA, on the case.
To prevent future abuses, the CIDB is implementing new performance reporting systems for contractors, clients, and consultants, as resolved at a recent presidential summit. This aims to provide a complete picture of a company’s conduct, including failed or incomplete projects, rather than just the successes they submit for grading.
Dladla estimated that with full cooperation from the client department, the core investigation could be concluded within three months, leading to possible deregistration of contractors. However, associated criminal proceedings may take significantly longer.
The outcome of this probe is being closely watched, as it strikes at the heart of public infrastructure delivery and good governance, with millions in public funds and vital community projects hanging in the balance.