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South African construction giant Group Five was pushed to financial collapse partly because the government failed to pay R800m it owed the company. The nonpayment highlights a systemic problem in the country's construction industry, which insiders say is crippling companies, especially emerging contractors. The situation is so dire that the Treasury has threatened to stop funding persistently defaulting departments and discipline public servants breaching the Public Finance Management Act and Municipal Finance Management Act when it comes to nonpayment or delayed payment to contractors. In March, Group Five went into business rescue, joining a growing list of South African construction firms that are either in financial difficulty or have folded. The company is reportedly dealing with a nearly R2.4bn cash shortfall. A source with knowledge of Group Five's business rescue plan said the company was in financial difficulty because the government owed it more than R800m. Heidi Geldenhuy...

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