Construction joint ventures: agreement and books

What a South African construction JV agreement should cover, which CIDB-endorsed JV form suits which partners, and how the JV keeps its own books.

By Achekam · 11 October 2026 · 5 min read · For Construction businesses in South Africa

Two contractors pool their grades, plant and people to chase a contract neither could win alone. The bid goes in, the award letter arrives, and only then does somebody ask the awkward questions: who puts up the working capital, who carries the loss if the programme slips, and whose bookkeeper records the joint venture's payment certificates?

Those questions belong in the joint venture agreement, signed before the first payment certificate is issued. In South Africa the Construction Industry Development Board (CIDB) has already done much of the thinking and points contractors to specific forms. Below is what the CIDB says a sound agreement covers, which endorsed form suits which partners, and how to give the joint venture books of its own.

Start from the CIDB's endorsed forms

The CIDB says there are four CIDB-endorsed forms of construction contract, and it publishes a consolidated document to help parties choose the right one. Those forms govern the relationship between the client and whoever builds. The joint venture agreement sits underneath: it governs the relationship between the partners who, together, are the contractor.

Keeping the two layers apart avoids confusion. The client contract decides how work is measured, valued and paid. The joint venture agreement decides what happens to that money once it lands, and who answers for a shortfall. The CIDB's page on endorsed forms of contract brings the forms, the selection guide and its advice on joint venture agreements together in one place.

Five things the agreement must pin down

According to the CIDB, a good joint venture agreement should:

1. Set out each member's contributions, with monetary values. Cash, plant, key staff, a site office, bank guarantees: each gets a value, so nobody later argues that one partner's excavators were worth more than the other's cash.
2. Record each member's percentage participation in risks, rewards, losses and liabilities. This share drives how profit is split and who funds a loss.
3. Establish a management body. Typically a committee with people from each partner, which takes the decisions the agreement reserves for it, such as appointing the project manager or approving a major subcontract.
4. Limit losses arising from a member's default. If one partner cannot fund its share or walks away, the agreement says what happens next, instead of leaving the other partner to absorb everything.
5. Provide for quick interim and effective final dispute resolution. A site disagreement cannot wait for a court date. The agreement needs a fast route for the meantime and a final route for when it really matters.

A useful test before signing: hand the draft to someone outside both companies and ask them to answer, from the document alone, who pays when a subcontractor's claim exceeds the budget. If they cannot, the agreement is not finished.

CIDB, SAFCEC or FIDIC: matching the form to the partners

The CIDB recommends a different joint venture agreement depending on who is combining:

Two established civil contractors combining for a large roads contract could look at the SAFCEC form. A firm of engineers teaming up with a quantity surveying practice for a professional services appointment fits the FIDIC consortium form. Where the partners are a mix, or an emerging contractor is partnering with a larger one, the CIDB's own agreement is the one it recommends for every type of contractor.

Whichever form you choose, the five points above still need filling in. A standard form supplies the structure; the values, percentages and names are yours to negotiate.

Every partner holds its own CIDB registration

The CIDB says its Register of Contractors applies to all contractors who want to do public sector work, grading them from 1 to 9 by financial and works capability, with no qualifying criteria for grade 1. It adds that joint venture partners must each be registered. Forming a joint venture is therefore not a way around registration; each partner brings its own. How grades relate to the tenders a contractor can pursue is covered in CIDB grades and tender limits.

Before signing, check each partner's registration status and grade, and diarise every renewal date. A partner whose registration lapses mid-contract is something the management body should hear about long before the client does.

Give the joint venture books of its own

A joint venture that runs its money through one partner's ledger causes trouble at every month end. The partner's own results are muddied, the other partner has to trust figures it cannot see, and the joint venture's profit has to be teased out with spreadsheets. Whether the joint venture is a separate taxpayer is a question for its advisers, but separate books make sense either way.

In Achekam, a joint venture can sign up as a business in its own right. It gets its own workspace, its own books and its own web address on the Achekam domain, and the person who signs it up becomes its administrator. Invoices to the client, subcontractor bills and the joint venture's bank account then sit in its ledger rather than in either partner's.

People who work in several workspaces, such as a partner's financial manager who also runs the joint venture's administration, switch between books from the header. A coloured bar shows whose books are open, which matters when the next entry is a payment certificate that belongs to the joint venture and not to the partner. For an account structure that suits contracting, see a chart of accounts for construction, and for running several related entities side by side, keeping several entities apart.

Deciding who sees the joint venture's figures

The management body should also settle who may work in the joint venture's books. From its workspace, the joint venture appoints an accounting firm by the firm's Achekam address or firm code, as accountant, auditor, tax practitioner, payroll provider or adviser, with an access level, and the firm accepts or declines.

Match the access to the job the agreement gives that firm:

• Bookkeeping access covers the accounting, but not the joint venture's users, settings or payment gateways.
• Review access is read-only, which suits a firm that only needs to look at the figures.

Either side can end an appointment; the firm then loses access and the books stay with the joint venture. Record in the agreement which firm acts for the joint venture, in which role, and what each partner receives from it, such as monthly management accounts, so neither partner depends on goodwill for information.

Before the next bid goes in with a partner, put the five CIDB points, the chosen form and the arrangements for the books on one page, and get both boards to agree to it.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.