Cape Town’s construction industry is under siege by the construction mafia, a serious problem that puts billions of rands worth of projects in jeopardy, according to a new report by the Global Initiative Against Transnational Organized Crime (GI-TOC). The report, titled The Shadow Economy: Uncovering Cape Town’s Extortion Networks and authored by Global Initiative Against Transnational Organised Crime senior expert Jenni Irish-Qhobosheane, explains how these organised crime groups use force, threats, and blackmail to get a cut of construction contracts.

The construction mafia is costing the country billions. Source: Shivendu Shukla/Unsplash

In February 2024, City of Cape Town official Robbie Roberts said at a workshop hosted by Business Against Crime South Africa that extortion was putting R3bn worth of construction projects at risk and that the city was trying to protect 22 sites, six of which had been shut down or closed. He said contractors had faced such severe threats that they could not continue their work, and some construction workers had even lost their lives.

According to Roberts, extortionists would show up on site and demand that work be halted until they got a portion of the contract or were given contracts to provide security services. He also disclosed that some construction companies were building extortion fees into their quotes and tenders as an input cost.