By: Gavin Taylor 

The collapse of South Africa’s major construction firms is often described as a tragedy. It isn’t.
It is a diagnosis.

Group Five. Basil Read. Murray & Roberts. Liviero. Icons that once defined South African engineering excellence, now reduced to business rescue proceedings, liquidation notices and halted construction sites. These are not isolated corporate failures. They are symptoms of a systemic breakdown — one that industry leaders, professional institutions, educators, regulators and government jointly created, tolerated, and then explained away.

For more than a decade, South Africa’s construction industry has been dying in slow motion. Everyone saw it happening. Almost no one acted decisively enough to stop it.

The Myth of “Bad Luck”

The convenient narrative is that these companies were unlucky: a stalled economy, delayed infrastructure spending, Covid, an oil price collapse, a failed offshore project, a difficult client.

But when every major contractor tells the same story, bad luck stops being an explanation.

Group Five’s implosion was triggered by a single disastrous Ghanaian power project — but only because the company had no resilience left. Basil Read was undone by cash flow leaks that had become culturally normalised. Murray & Roberts destroyed tens of billions of rand in shareholder value through avoidable strategic and governance failures. Liviero’s sites stand idle because government failed to pay what it owed — a story repeated so often it barely registers anymore.

This was not a storm. It was chronic exposure to known risks without adequate protection.

Industry’s Self-Inflicted Wounds

The construction industry must confront its own uncomfortable truths.

First, we accepted unsustainable margins. High-risk, capital-intensive, fixed-price contracts were bid at single-digit margins in the hope that claims, variations or future work would compensate. When the cycle turned, there was nothing left to absorb shocks.

Second, we tolerated poor cash discipline. Projects leaked cash while head office backstopped failure — until head office itself collapsed. Cash flow, not profit, is the true currency of construction. Too many leaders treated it as an accounting issue rather than a strategic one.

Third, we misunderstood risk. Contractual risk was accepted without being priced, transferred without being managed, and disputed without resolve — often against clients who could afford to wait longer than any contractor ever could.

Fourth, boards failed their fiduciary duty. Too many construction boards lacked deep sector experience. Strategic decisions — capital allocation, diversification, acquisitions and even rejecting viable takeover offers — were made without sufficient understanding of construction’s unforgiving economics.

But beneath all of this lies a quieter failure with far greater long-term consequences.

The Silent Crisis: Skills, Capability and Leadership

South African construction has failed to invest consistently in its people.

As margins tightened, training budgets were cut. As pressure increased, mentoring disappeared. The result has been a steady erosion of technical depth, institutional memory and leadership capability.

Talented engineers, project managers and quantity surveyors — frustrated by chaos, under-resourced projects and limited development — left the country or the industry altogether. The brain drain hollowed out middle management, precisely where complex projects succeed or fail.

Those who remained were often over-promoted too quickly, thrust into senior roles without the experience, support or systems required to succeed. When individuals struggle in these conditions, we call it incompetence. In truth, it is organisational failure.

An industry that does not train deliberately eventually runs out of leaders.

Education, Standards and a Sector Stuck in the Past

This skills crisis is compounded by the failure of universities, professional bodies and regulators to keep pace with technological change.

Too many construction-related degrees remain theoretical and poorly aligned with modern delivery realities: digital engineering, BIM, modularisation, advanced materials, integrated risk management and data-driven cost control.

Graduates arrive underprepared. Employers, under pressure themselves, lack the capacity to close the gap.

At the same time, the South African Bureau of Standards (SABS) and associated regulatory frameworks lag global best practice. Innovation is slowed by outdated standards, protracted approvals and a compliance culture focused on box-ticking rather than performance.

You cannot modernise an industry using yesterday’s rules.

Consultants: From Partners to Adversaries

Much of the construction ecosystem has become adversarial by default, and professional consultants are not immune.

Engineers, architects, quantity surveyors and project managers — often acting defensively — increasingly prioritise contractual positioning and point-scoring over problem-solving.

Disputes escalate early. Correspondence replaces collaboration. Risk is pushed downstream instead of managed collectively. The shared goal of delivering a successful project quietly disappears.

Most construction failures are not technical. They are relational. And relationships cannot be governed through clauses alone.

Industry Bodies Must Step Into Leadership

There is another uncomfortable truth the industry must face: contractors cannot fix this alone, and competition law anxiety has paralysed necessary conversations.

Industry bodies such as SAFCEC and the Master Builders Association (MBA) must step up — not as administrators or lobbyists, but as facilitators of protected, mature and transparent dialogue between contractors.

South Africa faces an infrastructure backlog conservatively estimated at over R400 billion. One thing is beyond dispute: the industry does not currently have the capacity to deliver this alone, firm by firm, project by project.

Delivery at this scale will require:

• structured delivery partnerships
• joint ventures built on capability, not convenience
• shared plant, skills and risk
• coordinated training and resource pipelines

Yet contractors are often afraid to even discuss capacity, sequencing or delivery models — for fear of accusations of collusion.

This paralysis is self-defeating.

There is a clear distinction between anti-competitive price fixing and legitimate collaboration on capability, capacity and delivery frameworks. Industry bodies must work with regulators to create safe harbours for these discussions — transparent, documented and focused on national delivery, not commercial advantage.

Without this, South Africa will either fail to deliver infrastructure — or outsource it entirely.

Neither outcome serves transformation, localisation or economic recovery.

Government’s Role: Client, Regulator, and Silent Executioner

If industry bears responsibility for poor decisions, government bears responsibility for enabling failure.

Government speaks constantly about infrastructure yet chronically under-spends what it budgets. Projects are announced but not approved. Procurement stalls under fear, incapacity and politicisation.

Even worse is government’s behaviour as a client.

Late payment is not an inconvenience — it is fatal. Contractors are forced to fund the state’s projects from their own balance sheets. No private enterprise can survive that indefinitely.

Layer this with adversarial contracts, slow claims adjudication and rigid procurement — and government becomes a structural risk rather than a delivery partner.

Unfortunately, there are a growing number of Private Developers who have learnt from this behaviour and are perpetuating it daily to the industry’s detriment.

The Cost of Failure

When a major contractor collapses:

• Jobs are lost
• SMEs collapse
• Projects stall
• Skills disappear
• Public trust erodes

South Africa now risks becoming a country that wants infrastructure but no longer has the domestic capability to deliver it.

What Must Change — Now

This industry will not be saved by another summit or strategy document. It will be saved only by behavioural change and leadership.

Industry must:

• Rebuild training pipelines and mentor deliberately
• Stop over-promoting without support
• Treat cash, risk and capability as strategic assets
• Embrace collaboration as a strength, not a weakness

Industry bodies must:

• Facilitate protected, structured contractor dialogue
• Enable delivery partnerships at scale
• Engage regulators to clarify safe collaboration boundaries
• Lead capability rebuilding, not just representation

Government must:

• Pay on time — without exception
• Reform procurement and contract models
• Spend what it budgets
• Enable innovation rather than obstruct it

A Shared Reckoning

This is not a call to blame. It is a call to grow up as an industry.

The collapse of South Africa’s construction sector was not inevitable. It was the result of tolerated behaviours, avoided conversations and leadership gaps across the system.

The next decade will be defined by whether industry, government and institutions are willing to change how they collaborate, how they train, how they contract — and how they lead.

We have already paid the price of denial.
We cannot afford the cost of pretending anymore.