EDITORIAL Construction
in a new era for SA construction contracts
South Africa’ s new GCC 2025 brings stricter dispute rules, tighter deadlines and tougher enforcement. Contractors who fail to prepare risk costly consequences.
South Africa ' s construction sector prepares for reforms following the release of the General Conditions of Contract( GCC) 2025, aimed at improving project management and dispute resolution.
Construction law specialists MDA Attorneys state that the new GCC contract from the South African Institution of Civil Engineering( SAICE) introduces changes that could surprise contractors and employers if they are not properly prepared.
Michelle Kerr, a director of MDA Attorneys, says, " The GCC is widely used in South African construction projects, so these changes are relevant to many stakeholders in the industry who adopt GCC 2025 as a standard contract. Some of the newly introduced provisions could have serious financial implications for those who do not understand them."
GCC 2025 and its possible implications
Perhaps the most significant changes relate to the handling of disputes. The new system introduces a two-stage claims process, allowing contractors more time to prepare detailed claims. However, it also enforces stricter deadlines for the employer’ s agent to decide on claims, leading to automatic rejection if responses are not submitted on time.
The dispute process is becoming increasingly structured yet more intricate," notes Kerr. " Parties will need to be much more disciplined about meeting deadlines and following procedures."
Another important new provision states that parties who do not comply with adjudication decisions will forfeit their right to challenge those decisions in later proceedings until they have complied. This change aims to enhance the enforcement of adjudicators’ decisions.
The reasons for terminating contracts have also been broadened to include failure to adhere to an adjudicator’ s decision.
The changes incorporate lessons learned from recent challenges, including the COVID-19 pandemic, with provisions recognising government-declared states of emergency and disaster as valid reasons for project delays.
" These updates show SAICE has been listening to industry feedback and addressing real-world problems," says Kerr. " However, the devil is in the details and will determine how these provisions will work in practice."
With GCC 2025 expected to become the standard for many new projects, industry players are advised to familiarise themselves with the changes and update their internal processes accordingly. " The key is preparation," concludes Kerr.
" Companies that understand these changes and adapt their procedures will hold a significant advantage over those caught unprepared." ■
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