South Africa: Top 5 significant legislative changes, regulatory developments or trends affecting the construction industry

The GCC, published by the South African Institution of Civil Engineering (SAICE), was updated for the first time in a decade, with the new edition released in September 2025. It remains one of South Africa’s key bespoke standard‑form construction contracts, tailored for the local construction and infrastructure sector, formally endorsed by the Construction Industry Development Board (CIDB) as one of the standard form contracts recognised for use for public‑sector projects.

The 2025 GCC introduces 129 amendments which include, amongst other things, the following significant high‑level changes: (1) incorporating a due practical completion date; (2) introducing a new advance warning clause (similar to the early warning provisions under the NEC standard form contracts) to promote early warning and proactive contract management; (3) amplifying the consultative role of the Employer’s Agent; (4) enhancing termination, variation order and payment procedures; (5) expanding claim processes into a two‑stage process with a deemed rejection if the Employer’s Agent fails to respond on time; and (6) providing a clearer multi‑tiered dispute resolution process.

These changes align with a broader shift in the 2025 GCC toward improved risk‑sharing, refinement of time and completion concepts, proactive management and strengthened dispute‑avoidance mechanisms.

As standard form contracts play a central role in shaping risk allocation, pricing, programme certainty and dispute behaviour, the 2025 GCC amendments are likely to materially influence risk pricing, claims strategies and dispute outcomes, particularly on large and complex public‑sector projects.²

Does this development reflect a broader trend?

The GCC reflects a broader regional and global shift in standard form construction contracts towards earlier identification and management of risk, clearer and more operationally realistic time and payment regimes and a policy reference for dispute avoidance rather than reactive dispute resolution. Comparable developments can be observed in recent updates to international standard forms such as FIDIC, and the NEC indicating that GCC 2025 aligns South African practice more closely with prevailing international trends in infrastructure contracting.

² A New Era in South African Infrastructure: Launch of SAICE’s GCC 2025 - SAICE, GCC 2025: A New Era For South Africa’s Construction Contracts | Infrastructure news, SAICE launches GCC 2025 as updated framework for South Africa’s construction industry.

The National Treasury Regulation 16 (NTR16)³ was amended by the Minister of Finance in terms of section 76 of the Public Finance Management Act No. 1 of 1999, as amended⁴ and came into effect in June 2025 to introduce new regulations for public-private partnerships (PPPs).

NTR 16 is intended to streamline and clarify the legislative framework for PPPs by, among other things:

1. streamlining approval processes for smaller projects that meet the Minister of Finance’s monetary threshold;⁵
2. establishing a PPP Advisory Unit to support PPP registration, feasibility assessments, each procurement phase, lifecycle management, and knowledge‑sharing to ensure consistency across institutions; and
3. introducing a requirement for National Treasury to approve the preferred bidder before award, together with defined exemptions.

Fundamentally, NTR16 expands private‑sector participation in PPPs by allowing any private‑sector party (natural or juristic) to initiate a PPPs through an unsolicited proposal (USP) in designated strategic sectors such as the infrastructure sector, with National Treasury regulating the registration and procurement of such USPs. The USP Guidelines published on 31 October 2025,⁶ together with standard templates, provide comprehensive guidance and a disclosure and reporting regime for the private sector and government practitioners. They clarify which PPPs qualify for unsolicited submission, the required format and content of proposals, and the process‑management requirements needed to uphold competitive market principles. Collectively, these reforms are expected to strengthen the USP pipeline by enabling faster project identification and prioritisation and by addressing capacity constraints across government.

As evidenced by President Ramaphosa’s State of the Nation Address (SONA) on 12 February 2026,⁷ the state will focus on and build on public-private participation, emphasise infrastructure development and building the country’s green energy offering along with related industries to ensure South Africa remains competitive in the global market.

Does this development reflect a broader trend?

Public‑private partnerships (PPPs) are widely used globally as a mechanism to mobilise private capital, skills and innovation for the delivery of public infrastructure, particularly where governments face fiscal constraints or capacity challenges. Many jurisdictions employ PPPs to accelerate infrastructure delivery, improve lifecycle asset management, and transfer appropriate risks to the private sector. Within this broader context, South Africa’s recent reforms reflect international trends.

Similarly, the expansion of private‑sector participation in PPPs through USPs mirrors established international practice. USPs are recognised by the World Bank Group and incorporated into frameworks adopted by UNCITRAL, as well as implemented in countries such as Chile, Australia, Puerto Rico, Canada, Ghana and the Philippines, where they are used to stimulate innovation and identify strategic infrastructure opportunities that may not emerge through traditional government planning cycles.

³ 52061 7-2-2025 NationalGov.
⁴ Public Finance Management Act.
⁵ PFM SCM Instruction No. 02 of 2021-22 Procurement thresholds and processes.
⁶ 2025103101 Media Statement - Fiscal Commitments and Contingent Liabilities (FCCL) and Unsolicited Bid Proposal (USP) Guidelines.
⁷ State of the Nation Address by President Cyril Ramaphosa | The Presidency.

A key piece of legislation is the Construction Industry Development Board Amendment Bill of 2024 (the CIDB Bill):¹

• The CIDB Bill, introduced in 2024, proposes significant amendments to the Construction Industry Development Board Act 38 of 2000, the most far‑reaching being the extension of the CIDB’s regulatory framework to the private sector by bringing private procurement and projects within its scope.

• It introduces national registers for both contractors and professional service providers across the public and private sectors, effectively prohibiting any construction works by unregistered contractors and professional service providers and making non‑compliance a criminal offence punishable by a fine.

• Registered contractors and professional service providers may also be removed from the applicable register. Key reforms include the creation of a national register of professional service providers, the introduction of offences and penalties, and a new governance structure separating regulatory and oversight functions within the CIDB. Collectively, these changes substantially expand the existing CIDB regime and will affect developers, private employers, funders and professional teams beyond the public sector.

• Although the Bill has not yet been promulgated, public comment closed in November 2024.² All submissions were consolidated and provided to the executive authority for consideration. The Bill must then be submitted to the Office of the Chief State Law Advisor for final certification and may also be referred to the National Economic Development and Labour Council for review. Thereafter, it will be handed to Cabinet to initiate the parliamentary process.

• While it is unclear how far the CIDB Bill has progressed within this sequence, it is reasonable to conclude that the process is underway and its coming into effect is imminent.

Other proposed legislative reform includes:

• Unlike the CIDB Bill, the contemplated Public Works Bill and the Infrastructure Development Amendment Bill have not yet been published in a government gazette, although both were recently tabled in 2025 by the Parliamentary Monitoring Group.³

• A concept document was issued to justify the need for legislative reform of the Council for the Built Environment (CBE) Act, the status and whether this piece of legislation will be subject of review and reform is yet to be determined.

Does this development reflect a broader trend?

As it pertains to the CIDB Bill, similar trends are evident in jurisdictions seeking to impose minimum qualification, registration and compliance thresholds across both public and privately funded projects. The proposed South African reforms would place the local market firmly within this global trajectory.

⁸ Construction Industry Development Board Amendment Bill: Draft, https://www.ecmba.org.za/draftcidbbill24.
⁹ Proposed Infrastructure Development Bill, CBE Bill & CIDB Bill: DPWI briefing; with Deputy Minister | PMG.
¹⁰ Proposed Infrastructure Development Bill, CBE Bill & CIDB Bill: DPWI briefing; with Deputy Minister | PMG.

In his SONA, President Ramaphosa indicated that specialised commercial/infrastructure courts would be established to address disputes arising from the implementation of tenders which ‘often delay the implementation of necessary infrastructure’. He noted that this would involve assigning dedicated judges and court rolls for such matters.

The anticipated implementation timeline for this reform is presently unknown.

Does this development reflect a broader trend?

The proposed introduction of specialized commercial/infrastructure courts aligns with a wider international trend towards these specialized courts designed to handle complex, high-value disputes efficiently. Comparable models exist in jurisdictions such as the UK, Singapore and the UAE.

Domestically, the proposal compliments other recent initiatives aimed at accelerating infrastructure delivery, improving procurement outcomes and restoring investor confidence in long-term projects, particularly in the context of expanded public-private partnerships and large-scale capital programmes.¹¹

¹¹ SONA: Ramaphosa bets on R1 trillion infrastructure blitz to cement economic recovery.

To address long‑standing inefficiencies and the loss of confidence in South Africa’s construction capacity, the Minister of Public Works and Infrastructure, Dean Macpherson, announced the South African Construction Action Plan (SACAP) in late 2025.

The SACAP is intended to restore delivery performance, strengthen financial discipline, rebuild confidence in the procurement system, enhance transparency, and ensure that projects are completed on time and within budget.¹²

The SACAP is based on the following core tenets: (1) implement accountability and contractor blacklisting measures; (2) Fixing cash-flow constraints; (3) Introduce digital infrastructure tracking relating to the status of infrastructure projects and quarterly reporting thereof; (4) Procurement reform; (5) Strengthening audit and governance outcomes; and (6) Professionalizing the built environment in the public sector. To date, the full plan has not been published.

Notably, the contemplated contractor blacklisting measure seems redundant due to the blacklisting measures maintained by National Treasury applicable to the wider procurement process, and not only construction-related procurement. The introduction of a dedicated database as the SACAP envisages risks duplication and the creation of inefficiencies.

What is the effect on the market of these developments?

The initial market reaction in terms of the above developments has been cautiously positive, with industry bodies highlighting improved fairness and clarity. In the short term, however, the market is likely to experience a transition period as project teams familiarise themselves with the revised provisions. This may result in more conservative pricing while risk implications are tested in practice, together with an increased risk of early procedural disputes, particularly where notice, early‑warning or payment mechanisms are not properly understood or implemented.

However, in cases such as the proposal for specialised commercial/infrastructure courts, legal commentators have cautioned that the success of the specialized courts will depend on sufficient judicial capacity and resourcing; clear rules on case allocation and ensuring that expedited processes do not compromise procedural fairness or simply shift backlogs elsewhere in the system.¹³

To add to the current discourse, in our preliminary view, further clarity is required from the Department of Justice and Constitutional Development on the practicalities of how these specialised courts will operate and how they will be effective in practice. This is particularly relevant because delays in infrastructure projects generally arise after award, during the execution phase rather than during procurement, and are typically governed by contractual dispute‑resolution mechanisms under CIDB‑recognised standard‑form contracts (such as FIDIC, NEC and the GCC) for public‑sector projects, or bespoke agreements that limit court intervention to narrow circumstances. Even when tender‑phase disputes do arise, the parties would still be required to comply with applicable legislative and motion‑court timelines and procedures unless specific expedited rules for these specialised courts are introduced.

If the envisaged specialised courts are intended to accelerate the resolution of infrastructure‑related disputes and mitigate delays to these projects, their jurisdiction will need to be clearly defined and supported by detailed procedural guidelines. A comparative approach may be useful. For example, adopting elements of the structured model used by the UK’s Technology and Construction Court (TCC) to ensure that such courts function effectively. However, even in the case of the TCC, a changing market has seen its mandate shift towards enforcement rather than decision-making mainly due to the alternative dispute resolution regime governing the applicable contract.¹⁴

Absent the necessary clarity, the introduction of this specialised court risks becoming another cumbersome bureaucratic layer that fails to address the root causes of the delays it seeks to remedy.

¹² Minister Dean Macpherson: Press Briefing on the South African Construction Action Plan (SACAP) | South African Government.
¹³ Ramaphosa’s SONA Special Courts idea - Judges Matter.
¹⁴ History - Courts and Tribunals Judiciary.

Businesses should prepare for the evolving construction and infrastructure landscape by updating their contract‑management practices and strengthening administrative and governance processes. This includes understanding and applying the recent amendments to the GCC where relevant, and ensuring project teams are trained on new contractual requirements if and to the extent the standard-form applies to their project.

Companies should proactively monitor the CIDB Bill’s progress through Parliament and the development and impact of related legislative reforms. They should also begin preparing for the new regulatory obligations that will apply once the Bill is enacted. Fundamentally, Contractors and professional service providers, in particular, will need to ensure that they are duly registered with the CIDB to avoid the harsh penalty of a criminal conviction by performing the works absent such registration. As the scope and operation of the proposed specialised commercial and infrastructure courts remain undefined, these developments should likewise be closely tracked.

Private‑sector businesses now have the opportunity to strategically position themselves to take advantage of expanded PPP opportunities under NTR 16 and the new USP framework, particularly as infrastructure activity accelerates. However, the applicable regulations, guidelines and procedures are complex and must be closely monitored to ensure ongoing compliance.

To manage the associated increase in compliance obligations, companies should review and streamline their internal compliance processes to identify overlaps, reduce duplication, and ensure readiness.