Brochure Contractor Registration Guidelines

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The Construction Industry Development Board

development through partnership

GUIDELINES FOR CONTRACTOR REGISTRATION
Thank you for your interest in being registered as a contractor on the cidb Register of Contractors. To ensure successful registration and avoid delays please ensure that you furnish the cidb with all the necessary information and supporting documents when you apply.
V-2 : 2011

WHO MUST APPLY?
All contractors seeking to participate in public sector infrastructure delivery must be registered on the cidb Register of Contractors. Contractors who are exempted from registration are: • Home builders, unless they also wish to tender for other kinds of public sector construction work. • Those who undertake contracts consisting substantially of the provision of labour. • Those who undertake contracts consisting substantially of the provision of supplies.

Application Received

Compliant?

Non-Compliant Letter sent allowing 60 days before Cancellation

WHY REGISTER?
According to the CIDB Act 38 of 2000 no public sector client may award construction contracts to a contractor who is not registered.The Register grades and categorises contractors according to their capability to carry out construction projects. There are 9 different grading levels according to which contractors can be registered. A grade determines the maximum Rand value of a project as well as the type of construction works a contractor is capable to perform.
Application Registered within 21 Working Days

TABLE 1(A): TENDER VALUE RANGES Grade
1 2 3 4 5 6 7 8 9

Annual Confirmation Received?

Registration suspended after three months grace period

Tender value less than or equal to (R)
200 000 650 000 2 000 000 4 000 000 6 500 000 13 000 000 40 000 000 130 000 000 No limit
Registration Renewed 3 Year Renewal Received
Registration removed from the register on the date of expiry

Registration Updated

TYPES OF WORKS THAT CONTRACTORS CAN REGISTER FOR:
SPECIALIST WORKS Works identified and defined by the Board that involve specialist capabilities for their execution SB SC SD SE SF SG SH SI SJ SK SL SM SN SO SQ
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The extension, installation, repair, maintenance or renewal, or removal of asphalt The development, extension, installation, removal and dismantling, as relevant, associated with building excavations, shaft sinking and lateral earth support The development, extension, installation, repair, renewal, removal or alteration of corrosion protection systems (cathodic, anodic and electrolytic) Demolition of buildings and engineering infrastructure and blasting The development, extension, installation, renewal, removal, renovation, alteration or dismantling of fire prevention and protection infrastructure (drencher and sprinkler systems and fire installation) The development, extension, installation, renewal, removal, renovation, alteration or dismantling of glazing, curtain walls and shop fronts The development, extension, installation, maintenance, renewal, removal, alteration or dismantling, as relevant, of landscaping, irrigation and horticultural works The development, extension, installation, repair, maintenance, renewal, removal, renovation, alteration or dismantling of lifts, escalators, travellators and hoisting machinery The development, installation, removal, or dismantling, as relevant, of piles and other specialised foundations for buildings and structures The installation, renewal, removal, alteration or dismantling, as relevant, road markings and signage The development, extension, installation, renewal, removal, renovation, alteration or dismantling of structural steelwork and scaffolding Timber buildings & structures The extension, installation, repair, maintenance, renewal, removal, renovation or alteration, as relevant, of the waterproofing of basements, roofs and walls using specialist systems The development, extension, installation, renewal, removal, alteration, or dismantling or demolition of water installations and soil and waste water drainage associated with buildings (wet services and plumbing) The development, extension, installation, repair, removal, alteration, dismantling or demolition of precast concrete, security fencing or steel security fencing

TABLE 1(B): MORE CLASSES OF CONSTRUCTION WORKS (Schedule 3 of the regulations)
DEFINITION
CIVIL ENGINEERING (CE)
Construction Works primarily concerned with materials such as steel, concrete, earth & rock & their application in the development, extension, installation, maintenance, removal, renovation, alteration, or dismantling of building and engineering infrastructure Water, sewerage, roads, railways, harbours and transport, urban development & municipal services • Structures such as cooling tower, bridge, culvert, dam, grand stand, road, railway, reservoir, runway, swimming pool, silo or tunnel. • The results of operations such as dredging, earthworks and geotechnical processes. • Township services, water treatment and supply, sewerage works, sanitation, soil conservation works, irrigation works, storm-water and drainage works, coastal works, ports, harbours, airports and pipelines

BASIC WORKS TYPES

EXAMPLES

ELECTRICAL ENGINEERING WORKS - BUILDING (EB) - Electrical certificate Required
Construction Works that are primarily concerned with the installation, extension, modification or repair of electrical installations in or on any premises used for the transmission of electricity from a point of control to a point of consumption, including any article forming part of such an installation All electrical equipment forming an integral and permanent part of buildings and/or structures, including any wiring, cable jointing and laying and electrical overhead line construction • Electrical installations in buildings • Electrical reticulations within a plot of land (erf) or building site • Standby plant and uninterrupted power supply • Verification and certification of electrical installations on premises

ELECTRICAL ENGINEERING WORKS - INFRASTRUCTURE (EP)
Construction Works that are primarily concerned with development, extension, installation, removal, renovation, alteration or dismantling of engineering infrastructure: a) relating to the generation, transmission and distribution of electricity; or b) Which cannot be classified as EB Electrical power generation, transmission, control and distribution equipment & systems • Power generation • Street & area lighting • Substations & protection systems • Township reticulations • Transmission lines

GENERAL BUILDING WORKS (GB)
Construction Works that: a) are primarily concerned with the development, extension, installation, renewal, renovation, alteration, or dismantling of a permanent shelter for its occupants or contents; or b) cannot be categorised in terms of the definitions provided for civil engineering works, electrical engineering works, mechanical engineering works, or specialist works Building & ancillary works other than those categorised as: • civil engineering works • electrical engineering works • mechanical engineering works • specialist works • Buildings for domestic, industrial, institutional or commercial occupancies • Car ports • Masonry (brick, block or stone) and lightly reinforced or unreinforced cast in-situ concrete walls and timber fences • Stores • Walls

MECHANICAL ENGINEERING WORKS (ME)
Construction Works that are primarily concerned with the development, extension, installation, removal, alteration, renewal of engineering infrastructure for gas transmission and distribution, solid waste disposal, heating, ventilation and cooling, chemical works, metallurgical works, manufacturing, food processing and materials handling • Machine systems including those relating to the environment of building interiors • Gas transmission and distribution systems • Pipelines • Materials handling, lifting machinery, heating, ventilation and cooling, pumps • Continuous process systems, chemical works, metallurgical works, manufacturing, food processing such as that in concentrator machinery and apparatus, oil and gas wells, smelters, cyanide plants, acid plants, metallurgical machinery, equipment and apparatus, and works necessary for the beneficiation of metals, minerals, rocks, petroleum and organic substances or other chemical processes • Central heating • Centralised hot water generation • Compressed air, gas & vacuum installations • Conveyor & materials handling installations • Continuous process systems involving chemical works, metallurgical works, oil and gas wells, acid plants, metallurgical machinery, equipment and apparatus, and works necessary for the beneficiation of metals, minerals, rocks, petroleum and organic substance and other chemical processes • Dust and sawdust extraction • Kitchen equipment • Laundry equipment • Refrigeration & cold rooms • Waste handling systems (including compactors) • Air-conditioning & mechanical ventilation • Boiler installations & steam distribution

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CAN A CONTRACTOR BE REGISTERED IN DIFFERENT GRADES?
A contractor may apply to be graded in one or several grades. However a contractor can only be registered in 1 grade per class of works.

PROVIDING SUFFICIENT EVIDENCE TO SUPPORT YOUR APPLICATION
The cidb evaluates applications for grading and registration based on evidence of works and financial capability provided by the contractor. Evidence is then used to determine which grade and class of works a company qualifies for. Once a grade has been determined and approved by the Board a contractor is then able to tender for construction contracts within the approved grade. Should a contractor fail to provide sufficient evidence to support the grade applied for the cidb will determine an appropriate grade based on the information at its disposal. A contractor has the right to appeal the decision of the cidb. To determine grading the cidb evaluates a contractor’s financial and works capability.

FINANCIAL CAPABILITY REQUIREMENTS:
To determine financial capability the cidb takes into consideration: 1. The best annual turnover over the two financial years immediately preceding the application and available capital. 2. Available capital. The cidb calculates available capital by adding any financial sponsorship to the sum of the net asset value of a contractor as indicated in the most recent financial statements. Net Asset Value is the difference between the total assets and total liabilities of a company as reflected in the company's most recent financial statements. 3. Financial sponsorship. Financial sponsorship must be a collectable financial guarantee by one person (a sponsor) to another, (the beneficiary). Financial sponsorship must be: • A determined amount to support operations of the contractor concerned in order to complete projects. Any sponsorship from another company other than a financial institution may not exceed 15% of the sponsor's net asset value; • Available to the beneficiary as and when required; • If applicable, it must be available to a third person, such as a bank, to advance funds or such as a supplier, to advance a line of credit; • If applicable, it must be in a form acceptable to any financial institution in South Africa as defined in the Financial Services Board Act, 97 of 1990; and Please note that: a) where the sponsor is a registered contractor or owns 50 percent or more of the applicant contractor, sponsorship may constitute up to 100 percent of the total required available capital; b) where the sponsor is not a registered contractor and owns 25 percent or more of the applicant contractor, sponsorship may not exceed 75 percent of the total required available capital; and c) where the contractor is not a registered contractor and the sponsor owns less than 25 percent of the applicant contractor, sponsorship may not exceed 50 percent of the total required available capital.

WORKS CAPABILITY REQUIREMENTS EXPLAINED:
Works capability is determined by: • The largest contract undertaken and completed in the relevant class of construction works within the 5 years immediately preceding the application; • The total number of full time registered professionals employed (See Table 3 and 4) • The fulfillment of relevant statutory requirements.

TYPES OF GRADING METHODS USED:
There are two methods that a contractors grade may be assessed on (see Table 2 below): Method A is based on financial capacity and works capability and is applicable to all grades. Method B is based on available capital and the number of registered professionals employed and is only applicable for grades 5 - 9. (There are no turnover and track record requirements for Method B). The requirement for available capital and registered professionals for Method B is higher than the requirement for Method A.

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TABLE 2: FINANCIAL & WORKS CAPABILITY REQUIREMENTS FOR METHOD A AND METHOD B
Method A
Grade Maximum tender value (R) Best Annual turnover (R) over 2 years immediately preceding application 2 3 4 5 6 7 8 9 650 000 2 000 000 4 000 000 6 500 000 13 000 000 40 000 000 130 000 000 No limit 0 1 000 000 2 000 000 3 250 000 7 800 000 24 000 000 90 000 000 270 000 000 0 OR 100 000 OR 200 000 650 000 1 300 000 4 000 000 13 000 000 40 000 000 Available capital (R) Largest contract (R) over 5 years immediately preceding application 150 000 500 000 1 000 000 1 600 000 3 250 000 10 000 000 32 500 000 100 000 000 N/A N/A N/A 1 300 000 2 600 000 8 000 000 26 000 000 80 000 000

Method B
Available capital (R)

The minimum number of registered professionals per grade for method A and B is indicated below in Table 3 and table 4 respectively:

TABLE 3: MINIMUM NUMBER OF REGISTERED PROFESSIONALS REQUIRED
(BASED ON METHOD A)
Works Capability Minimum Number of Full-Time Equivalent Registered Professional(s) Required for Registration in a Class of Construction Works Civil Engineering (CE) Electrical Engineering (EB & EP) Mechanical Engineering (ME) Specialist Works

Designation

Maximum Value of General Building Contract that a (GB) contractor is considered capable of performing R 13 000 000 R 40 000 000 R 130 000 000 No Limit N/A 1 2 3

6 7 8 9

N/A 1 2 3

1 2 3 4

1 2 3 4

1 2 3 4

TABLE 4: MINIMUM NUMBER OF REGISTERED PROFESSIONALS REQUIRED
(BASED ON METHOD B)
Works Capability Minimum Number of Full-Time Equivalent Registered Professional(s) Required for Registration in a Class of Construction Works Civil Engineering (CE) Electrical Engineering (EB & EP) Mechanical Engineering (ME) Specialist Works

Designation

Maximum Value of General Building Contract that a (GB) contractor is considered capable of performing R 6 500 000 R 13 000 000 R 40 000 000 R 130 000 000 No Limit 1 2 4 6 8

5 6 7 8 9

1 2 4 6 8

1 2 4 6 8

1 2 4 6 8

1 2 4 6 8

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• The contractor must employ the minimum number of registered professionals permanently (full time) or the equivalent number of persons on a part time basis (totalling 40 hours a week). • The "full-time equivalent" means that, for example, two part time engineers, each working 20 hours a week, would equal one full-time engineer. • A registered professional is recognised by virtue of his or her training and experience as having the necessary qualifications to undertake construction works in a specific class. All registered professionals (e.g. architects, quantity surveyors, etc.) employed by a contractor are required to be registered with relevant built environment councils:

The following classes of construction works require professionals who are registered in accordance with the following councils:
Civil Engineering, Electrical Engineering and Mechanical Engineering • Engineering Profession Act 46 of 2000 (Council: ECSA) or • Project and Construction Management Professions Act 48 of 2000 (Council: SACPCMP) General Building and Specialist Works • Project and Construction Management Professions Act 48 of 2000 (Council: SACPCMP) or • Engineering Profession Act 46 of 2000 (Council: ECSA) or • Architectural Profession Act 44 of 2000 (Council: SACAP) or • Quantity Surveying Profession Act 49 of 2000 (Council: SACQSP) or • Landscape Architectural Profession Act 45 of 2000 (Council: SACLAP)

ELECTRICAL ENGINEERING
All contractors applying for the EB class of works must provide the cidb with an originally certified copy of their Electrical contractor's certificate, issued by the Electrical Contractor’s Board. It is important that the Electrical contractors' certificate is in the name of the company applying and it must still be valid at the time of registration. A valid, originally certified copy of the Electrical contractors' certificate must be provided to the cidb annually.

SUPPORTING DOCUMENTS
Please note that: • All financial statements for a private company must be audited. The cidb may, for other forms of company where the financial statements are not audited, request supporting evidence of that contractor's turnover. Such evidence would be in the form of the South African Revenue Services Form VAT 201 (return for value added tax) and proof of payment of that value added tax; • A contractor's records may be transferable from one enterprise to the other where the same entity either: a) Changes name, b) converts to a close corporation, c) amalgamates with another company, d) is taken over by another company or e) changes membership or member's interest of a close corporation • An original tax clearance certificate is a compulsory requirement for all applications. If a foreign enterprise has not yet performed contracts in South Africa but wants to register it must provide proof that it has paid all taxes due to the government of its origin.

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JOINT VENTURES
A joint venture is a grouping of two or more contractors who jointly and severally undertake to perform a construction works contract. Once-off joint ventures do not have to register. However, each partner of the joint venture must be registered separately and the leading partner must have a contractor grading designation in the relevant class of construction works. The cidb has developed a calculator to enable assessment of joint ventures. This calculator is available on the cidb website at

www.cidb.org.za. POTENTIALLY EMERGING ENTERPRISES
Contractors may also apply to be recognized as Potentially Emerging (PE) contractors. "Emerging enterprise" means an enterprise which is owned, managed and controlled by previously disadvantaged persons and which is overcoming business impediments arising from the legacy of apartheid. A registered, potentially emerging contractor may be awarded a contract at one level higher than the enterprise's registered contractor grading designation, if the client or employer: • is satisfied that such a contractor has the potential to develop and qualify to be registered in that higher grade; and • ensures that financial, management or other support is provided - in the context of a targeted development programme to enable the contractor to successfully execute that contract.

HOW TO APPLY:
All applications must be submitted on an approved registration form, which may be collected at any of our nationwide Construction Contact Centres, or downloaded from our website at www.cidb.org.za • Contractors applying for Grade 2 - 9 must use the application form CRS F006. • Contractors applying for Grade 1 must use the application form CRS F007. Contractors who submit incomplete applications have a 60 day grace period from the date of application in which to submit outstanding information and supporting documents. Failure to comply will result in cancellation of the application. Administration fees are non-refundable. Registration is valid for a three year period, subject to payment of an annual fee and subject to compliance with the code of conduct for contractors as published by the cidb in the Government Gazette no. 25656 of 2003. To prevent fraud the cidb no longer prints contractor registration certificates. Clients and other stakeholders must consult the cidb website www.cidb.org.za to verify a contractor's grade. Please ensure that your application meets all cidb requirements together with the relevant documentary evidence for the grades applied for. For comprehensive requirements to apply in each grade please consult the cidb Checklist for Contractor Registration included in this guideline.

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TABLE 5: REGISTRATION FEES
Contractor Grading Designation Upper limit of Tender Value Range Designation R R R R 650 000 2 000 000 4 000 000 6 500 000 Administration / Renewal Fee in respect of each Grade applied for R 450 R 750 R 750 R 750 R 750 R 750 R 750 R 750 Annual Fees Payable in respect of the Highest Contractor Grading Designation R R R 250 350 900

2 3 4 5 6 7 8 9

R 1 750 R 3 500 R 9 000 R 29 000 R 55 000

R 13 000 000 R 40 000 000 R 130 000 000 No Limit

Note: Please use your enterprise name as the reference when making payment. Contractors already registered with the cidb, should please use their cidb registration number (CRS number) as the reference. Please note that the cidb does not accept cash payments and cheques over the counter.

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APPLYING FOR GRADE 1
Grade 1 contractors can register over the counter at any of the provincial Construction Contact Centers. It takes 48 hours for a Grade 1 registration to be approved by the cidb, and to become visible on our website under the approved contractors listing. Registration is valid for a period of three years and there are no annual fees payable. Grade 1 contractors are not required to submit proof of financial capability or track record of projects previously completed.

REQUIRED DOCUMENTATION FOR GRADE 1 APPLICATIONS
• • • • • • Application form. Proof of Payment. Company Registration documentation. Identity Documents for a maximum of 20 principals. Tax Clearance certificate. Electrical Contractors License (for EB class of works only).

Note that the payment for grade 1 class of works is R450 per class of works, valid for 3 years. (For example, an application for 1CE = R450.00 whereas an application for both 1CE and 1ME = R900.00)

APPLYING FOR GRADES 2 - 9
Applications for registration in grades 2 - 9 are assessed in terms of both financial and works capability requirements.

REQUIRED DOCUMENTATION FOR GRADE 2 - 9 APPLICATIONS
All required documents for Grade 1 PLUS • Financial statement for the two years immediately preceeding the application. (used to determine the financial capability) • Track Record documents (used to determine the works capability) • Letter of Award • Certificate of Completion • Final / latest payment certificate • Registered Professionals certificate(s) with a relevant built environment council (used to determine the works capability). See table 3 & 4 on page 4. Consult the checklist on page 10 for a comprehensive list of registration requirements.

REGISTRATION FEES (FOR GRADE 2 - 9 APPLICATIONS ONLY)
Registration fees are mandatory, and required for all initial application, as well as amendments to existing registrations. Registrations are valid for a 3 year period, whereafter a re-application for registration is required. A payment is made up of two parts, • An admin payment which is payable for each class of works applied for. • An annual payment which is payable in advance for the highest class of works applied for, and required as an annual obligation. Payment should be made to the cidb in the following instances. 1. Initial registration with the cidb a. Admin fees for each class of works applied for. b. Annual fees only for the highest grade applied for. 2. Annual update a. Annual fees only for the highest grade. 3. 3 Year renewal a. Admin fees for each class of works applied for. b. Annual fees only for the highest grade applied for. 4. Upgrade a. Admin fees for each class of works to be upgraded. b. The difference in the Annual fees from the highest grade currently registered in and the highest grade applied for (pro-rata for the remainder of the annual period). 5. Additional class of works. a. Admin fees for each class of works to be added. b. The difference in the Annual fees from the highest grade currently registered in and the highest grade applied for (if the additional class of works is a higher grade), pro-rata for the remainder of the annual period.

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CONDITIONS OF REGISTRATION
The contractor must: • confirm particulars provided on his application form annually on or before the anniversary date of his registration; • pay the relevant administration fee(s), as well as the stipulated annual fee; • notify the cidb of any change of particulars relating to an existing registration; • be free from any restrictions to tender; • comply with the Code of Conduct for All Parties Engaged in Construction Procurement, as published by the cidb in the Government Gazette no. 25656 of 2003. (Also available at: www.cidb.org.za) • annually provide a valid, original tax clearance certificate, upon expiry of the previous certificate; and • renew registration every three years for requalification of grades. Please note that false information provided or a false declaration is a punishable offence in terms of the cidb ACT, Construction Industry Development Regulations and other applicable laws.

WHO IS THE cidb?
The cidb has been established in terms of the Construction Industry Development Board Act 38 of 2000. It has the mandate to lead the construction industry stakeholders in construction development and to facilitate regulation and development of the construction industry. The cidb is required in terms of the Construction Industry Development Board Act to establish the Register of Contractors. The Register grades and categorises contractors according to their capability to carry out construction projects. All contractors seeking to participate in public sector infrastructure delivery must be registered on the cidb Register of Contractors.

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CHECKLIST
SECTION B (i): Enterprise Particulars
Close Corporation (latest CK1 / CK2) Company: • Certificate of Incorporation (CM1) • List of all active directors (CM29) • Share certificates • All name change certificates (CM9) (if applicable) Partnership (partnership agreement) Trust ( a copy of the trust deed or JM21) Other:

SECTION B (ii): Principals and Ownership / Interest
Attach originally certified copies of Identity Documents (for a maximum of 20 principals)

SECTION D (i): Annual Best Turnover
Attach a complete set of financial statements (compliant with GAAP or IFRS) for the 2 financial years immediately preceding the application: • Public / Private company - Audited • Trust - Audited • Close Corporation - compiled by an accounting officer • Partnership - compiled by an accounting officer • Sole Traders - compiled by a bookkeeper / accounting officer

SECTION D (ii): Available Capital
Description and proof of financial sponsorship(s) • Financial institution sponsorship
OR

• Letter of sponsorship undertaking in the form of a members resolution from a CC and a board resolution from a Company • If sponsor is not a financial institution please attach the sponsors latest set of financial statements (compliant with GAAP or IFRS)

SECTION E: Track Record
For each class of works applied for, attach copies of: • Letter of award; and • Certificate of completion; and • Final payment certificate indicating the contract value. Maintenance contractors may provide client payment certificate indicating the value of work done to date; • Joint Venture agreement (if applicable); • Sub-contract agreement and corresponding bank statements (if applicable).

SECTION E (iv): Transfer of Track Record
Attach particulars of changes in name or company type OR Auditors letter confirming changes in company structure

SECTION F (i): Registered Professional(s)
Certificate of registration with the relevant built environment council / Ensure that the declaration is signed and ensure that the registered professionals sign

SECTION F (ii): Requirements for Registration in Electrical Engineering for EB class of works
Attach originally certified copy of the enterprise's valid Electrical Contractor's certificate / Ensure that the declaration is signed and ensure that the registered professionals sign

SECTION H: Payment of Fees
Attach proof of Payment (please use your company name or CRS number as the reference number when making payment).

SECTION I: Declaration
Attach valid, original Tax Clearance Certificate and; Attach signed declaration of the contractor and; Attach signed declaration of the registered professional(s) (if applicable).

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cidb CONSTRUCTION CONTACT CENTRES (CCC's):
Eastern Cape
Department of Public Works Qhasana Building Independence Avenue Bisho Tel: 0861 222 327 Fax: 086 674 2908

KwaZulu Natal
Department of Public Works 428 Blink Bonnie Road Mayville, Durban Tel: 0861 596 222 Fax: 086 856 6024

North West
Department of Public Works Old Parliament Building Modiri Molema Road Gate House Mmabatho Tel: (018) 387 2150 / 2435 Fax: 086 743 3193

Free State
Medford Building St. Andrews Street Ground Floor Bloemfontein Tel: 0861 377 222 Fax: 086 552 8692

Limpopo
Department of Public Works 1st Floor, Works Tower Building 43 Church Street Polokwane Tel: 0861 222 765 Fax: 086 678 9184

Northern Cape
Regional Department of Transport, Roads and Public Works 45 Schmidtdrift Road Kimberley Tel: 0861 222 627 Fax: 086 690 6295

Gauteng
Blocks N & R SABS Campus 2 Dr Lategan Road Groenkloof, Pretoria Tel: 0861 428 222 Fax: 086 680 8569

Mpumalanga
Nelcity Building Office No. G15 Cnr Samora Machel & Paul Kruger Street Nelspruit Tel: 0861 678 222 Fax: 086 685 6733

Western Cape
140 Long Street Cnr Long & Dorp Street Cape Town Tel: 0861 927 222 Fax: 086 674 0293

cidb HELP LINE: 0860 103 353 cidb FRAUD HOTLINE: 0800 112 432

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