Abstract
M.Tech. (Construction Management)
Small and medium-sized contractors play an important contribution in employment creation and income generation and are recognized in South Africa and worldwide. However small and medium-sized construction companies tasked with the responsibility to deliver subsidised low-income housing are facing challenges in delivering these houses in order to deal with South Africa’s the housing backlog. This study examines challenges faced by small and medium-sized contractors in the delivery of subsidised low-income houses and the role of government in housing delivery. The study was conducted with reference to existing theoretical literature, published as well as unpublished research and primary data that was collected through a well-structured questionnaire distributed to small and medium-sized companies that are involved in the delivery of subsidised low-income housing out of 176 questionnaires distributed 131 were received back which is a 74% response which formed the basis of this study. Frequency analysis and various statistical procedures were used to analyse the returned questionnaire data. One of the primary findings emanating from the study reveals that lack of technical skills; financial mismanagement and management incompetence are the major causes of housing delivery delays. The study also reveals that access to finance is one of the most important barriers experienced by the Small and medium-sized construction companies involved in subsidised low-income housing as their cash flow cannot withstand long periods before payment is received. Likewise the study revealed that a low Profit margin in low-income housing projects is another factor affecting the contractors. The delay in interim payments by the client as well as the milestone payment system used by the client is a challenge. It is recommended that the Department of Human Settlement looks into applying contract price adjustment provision (CPAP), introducing preliminaries and generals to the contract as well as increasing the current quantum figure for the construction of a unit.