Small contractors to benefit from advance payment facility | 14 February 2020
In an effort to address the challenges of small contractors in securing financing to assist in the mobilisation stage of implementing government capital projects, government is introducing a Mobilisation Advance Payment (MAP) facility.
The MAP is a 20% advance on the contract amount of a project, at zero interest. It will not have a bank or bond guarantee requirement. However, a contract agreement must be signed to secure the work being awarded and the funds advanced.
The MAP will apply for civil works projects up to the procurement threshold of R750,000, to Class III and IV contractors only. Contractors with a good track record of accomplishment in executing government projects, as well as with the Fair Trading Commission, will have to apply to the Ministry responsible for Finance to be extended this facility.
The facility is aimed to target particularly small projects, for instance; small district projects, minor repairs and maintenance works of a capital nature and construction works below the R750,000 threshold. It will not apply to minor repairs and maintenance works, such as replacing door locks on a one-off basis.
The other Class of contractors (Class I and II) can still be provided the normal advance payment as stipulated in their contracts, which requires a performance bond.
To apply for this facility kindly contact the Financial Planning and Control Division of the Finance Department, on extension 4382004.
Press release from department of Finance