The recent announcement by Minister of Public Works & Infrastructure, Dean Macpherson, about blacklisting 52 construction companies for poor performance and corruption marks a turning point for how South Africa handles public infrastructure projects. This move is about more than just enforcement; it is a clear signal that the era of tolerance for non-performance and substandard work is ending.

While this intervention is both necessary and long overdue, it raises an important question: is blacklisting alone enough to prevent future project failures?

“At Credeq Africa, we understand the importance of strong risk management backing this initiative,” says Oren Zukerman, Head of Construction Guarantees. “The government’s firm stance sends a strong message: quality and reliability, as opposed to an emphasis on the lowest bid, must be at the core of every project. However, effective reform also requires moving beyond static, point-in-time assessments of contractors and adopting a more dynamic understanding of risk that reflects real-time performance and capacity.”

Construction guarantees, provided by licensed financial service providers, play a critical role in safeguarding project delivery.

“Moreover, while bank and insurance guarantee wordings are identical and provide equivalent protection to the employer, insurance guarantees go a step further. At Credeq Africa, we provide a second opinion on a contractor’s ability to perform through evaluating a contractor’s financial strength, track record, operational capacity, character, business practices, and ability to deliver under real-world conditions. This creates an important layer of discipline before a project even begins,” he says.

“Importantly, it goes beyond financial metrics alone. It includes a deeper interrogation of how contractors are currently performing, whether they are managing multiple projects effectively, and whether there are early signs of distress or delivery risk that may not be visible through traditional evaluation methods.”

“Beyond that,” he adds, “guarantees provide procurement teams with confidence that contractors are not only capable but also financially prepared to complete their work as promised. This supports the government’s goal of professionalising public works and ensuring only qualified firms are involved. It also creates a framework for accountability that extends throughout the lifecycle of a project, not just at the point of award.”

At its core, underwriting isn’t just about risk management, it’s about fostering trust, accountability, and sustainable growth in the construction industry.

“Underwriting introduces an independent, commercially driven assessment of risk. It ensures that only contractors with the appropriate capacity and resilience are supported, particularly on large-scale or high-risk infrastructure projects,” Zukerman notes.

While policy reform and enforcement mechanisms are essential, successful infrastructure delivery ultimately depends on execution.

“Blacklisting sends a strong message, but the real impact will come from embedding preventative controls into the system. This includes stronger due diligence, ongoing project monitoring, and appropriately structured guarantees that protect all stakeholders,” he says. This becomes particularly important in an environment where contractors may re-emerge under different entities, as highlighted by the Department’s concerns around shell companies.

“An underwriting-led approach looks beyond the entity to assess the underlying risk, examining ownership structures, past performance, and financial behaviour. This can help identify red flags that may not always be visible through traditional procurement processes,” he adds.

“As controls tighten and expectations rise, underwriting must evolve to offer the right incentives and safeguards. Our job is to help create an environment where quality projects are delivered on time, within budget, and to the benefit of all South Africans. Beyond issuing guarantees, there is also an opportunity for us to share industry insights and risk learnings with the public sector to strengthen how contractors are assessed, supported, and monitored across the board.”

As South Africa continues to invest in infrastructure to drive economic growth and job creation, the need for reliable delivery partners has never been greater.

“There is a significant opportunity to align public sector objectives with private sector risk expertise. By integrating underwriting insight into the project lifecycle, we can help ensure that infrastructure is not only funded but delivered. This includes a more collaborative approach where knowledge, monitoring capability, and practical experience are shared to improve overall project outcomes and reduce the likelihood of failure across the infrastructure ecosystem,” Zukerman concludes.