Industry Matters
HVAC&R CONTRACTORS IN SA
— ARE WE BEING BULLIED?
SARACCA president and owner of 52 Engineering, John Parry, wrote this
letter to HVAC&R contractors in South Africa about the risks involved in
giving credit.
H
aving first-hand experience of a large building contractor
going into business rescue, I would like to point out the
risk involved in giving credit.
While attending the Master Builders South Africa
conference in September, the sorry state of our building
industry was highlighted.
Some of the problems mentioned were slow payments,
government policies, little public and private investment,
and security.
Below is a summary of South Africa’s ‘once-great
construction industry’:
Aveng (Grinaker/LTA) Huge financial losses
Basil Read In business rescue
Murry and Roberts Sold its local civil and building
construction
Stefanutti Stocks Restructured
ESOR In business rescue
Liviero In business rescue
NMC Liquidated
What are your experiences?
Let us know.
Contact John Parry at john@52eng.co.za or
RACA Journal editor, Ilana Koegelenberg, at
ilana@interactmedia.co.za and share your story.
So, should HVAC contractors give such large credit to
the building industry? Contracting is risky enough with
employment, safety, design, and resource planning, without
this having to be a major headache.
One of our SARACCA members told me that they were
bullied into signing a contract with a builder. When he asked
the builder for a payment guarantee, he was asked by the
builder if he was financially stable enough to handle the
project.
When he responded that it wasn’t his responsibility to fund
the project, both the consultant and project manager told him
to sort it out with the builder and to get his affairs in order or
else he was a risk to the project.
Isn’t this contractual bullying? Why don’t clients pay us
directly? Why shouldn’t we receive payment guarantees?
Credit has always been a huge risk to the HVAC industry,
which is being expatiated as the house of cards collapses in the
construction industry. RACA
76
RACA Journal I January 2019
www.hvacronline.co.za