PAYMENT PREDICAMENTS: EXPLORING FACTORS AND REMEDIES FOR MAIN CONTRACTOR-SUBCONTRACTOR DYNAMICS IN MALAYSIA
DOI:
https://doi.org/10.11113/aej.v14.20767Keywords:
timely payment, main contractors and subcontractors, pre/post covid 19 issues, SDG No.8, ConstructionAbstract
Making timely and efficient payments is a key component of a project's success. In the Malaysian construction industry, payment delays by the principal contractor and client on construction projects are a major cause of worry. This research aims to address payment concerns that contractors frequently encounter on construction projects. The objectives of this research are to identify the factors that cause payment issues and to recommend potential solutions to improve the payment issues between main contractors and subcontractors. A questionnaire survey was deployed for this research, with 145 respondents involved. The collected data was analysed using the IBM Statistical Package for the Social Sciences (SPSS) software. The findings stated that post-Covid-19 is the main factor that causes payment issues between the main contractors and subcontractors. On the other hand, new payment mechanisms among developers or clients who unlawfully withhold payment are the potential solution agreed upon by the respondents as the potential solution to the issue. The findings of this research can be useful to the relevant party to minimise any issue with payment between the main contractor and subcontractors. This research is in line with Sustainable Development Goals (SDG) No. 8: Promote sustained, inclusive, and sustainable economic growth for all.
References
Abeysinghe, Nadeesha, and Ruwan Jayathilaka. 2022. “Factors Influencing the Timely Completion of Construction Projects in Sri Lanka.” PLoS ONE 17(12 December): 1–22. http://dx.doi.org/10.1371/journal.pone.0278318.
Bäckstrand, Jenny, and Anna Fredriksson. 2022. “The Role of Supplier Information Availability for Construction Supply Chain Performance.” Production Planning & Control 33(9–10): 863–74. https://doi.org/10.1080/09537287.2020.1837933.
Bank Negara. 2019. Annual Report: Outlook and Policy in 2019. Kuala Lumpur. http://www.bnm.gov.my/files/publication/ar/en/2018/cp04.pdf.
Barbosa Júnior, Isaias de Oliveira, Alcebíades Negrão Macêdo, and Vitor William Batista Martins. 2023. “Construction Industry and Its Contributions to Achieving the SDGs Proposed by the UN: An Analysis of Sustainable Practices.” Buildings 13(5).
Bujang, Mohamad Adam, Evi Diana Omar, and Nur Akmal Baharum. 2018. “A Review on Sample Size Determination for Cronbach’s Alpha Test: A Simple Guide for Researchers.” The Malaysian journal of medical sciences : MJMS 25(6): 85–99.
Chadee, Aaron, Hanna Ali, Sihara Gallage, and Upaka Rathnayake. 2023. “Modelling the Implications of Delayed Payments on Contractors’ Cashflows on Infrastructure Projects.” Civil Engineering Journal (Iran) 9(1): 52–71.
Che Haron, Roziha, and Ahmad Lutfil Arazmi. 2020. “LATE PAYMENT ISSUES OF SUBCONTRACTORS IN MALAYSIAN CONSTRUCTION INDUSTRY.” PLANNING MALAYSIA 18(11 SE-Article). https://planningmalaysia.org/index.php/pmj/article/view/711.
Construction Industry Development Board Malaysia. 2021. Construction 4.0 Strategic Plan (2021-2025). 1st ed. Kuala Lumpur: Construction Industry Development Board. https://cream.my/my/media/com_eshop/attachments/Construction 4.0 Strategic Plan 2021-2025.pdf.
David, Hui et al. 2020. “The Continuing 2019-NCoV Epidemic Threat of Novel Coronaviruses to Global Health — The Latest 2019 Novel Coronavirus Outbreak in Wuhan, China.” International Journal of Infectious Diseases 91: 264–66.
Fateh, Mohd Ashraf Mohd, and Mohammad Fadhil Mohammad. 2021. “The Framework of Factors for the Improvement of the Significant Clauses in the Standard Form of Contract for the IBS Construction Approach in Malaysia.” International Journal of Sustainable Construction Engineering and Technology 12(1): 164–69.
Fateh, Mohd Ashraf Mohd, Hanah Zakariah, and Shaiifa Ema Ezanee. 2020. “Improvement for Significant Clauses in the Standard Form of Contract for Industrialized Building System Construction.” In IOP Conference Series: Materials Science and Engineering, IOP Publishing, 12037.
Gamage, Amila N. K. K. 2022. “Importance of Effective Communication to Minimize Disputes in Construction Projects.” Scholars Journal of Engineering and Technology 10(7): 128–40.
Gamil, Dr. Yaser, and Abdulsalam Alhagar. 2020. “The Impact of Pandemic Crisis on the Survival of Construction Industry : A Case of COVID-19 Dr . Yaser Gamil Abdulsalam Alhagar.” Mediterranean Journal of Social Sciences 11(4): 122–28.
Göksu, Serkan, Erdal Demirhan, and Banu Demirhan. 2023. “Implementation of Citizen-Oriented Economic Policies BT - Citizen-Centered Public Policy Making in Turkey.” In eds. Volkan Göçoğlu and Naci Karkin. Cham: Springer International Publishing, 425–45. https://doi.org/10.1007/978-3-031-35364-2_23.
Hadi, N. A., M. K.F. Othman, and A. M. Dadi. 2018. “The Perception on the Importance of Construction Industry Payment and Adjudication Act (CIPAA) 2012 Towards Remedying Payment Disputes: A Research on Subcontractors in Kuching, Sarawak.” IOP Conference Series: Materials Science and Engineering 429(1).
Haron, Roziha Che, and Ahmad Lutfil Hadi Arazmi. 2020. “Late Payment Issues of Subcontractors in Malaysian Construction Industry.” Planning Malaysia 18(1): 78–91.
Kamil, Abdul Izz Mohd et al. 2023. “The Awareness of CIPAA in Remedying Payment Issue among Contractors in Malaysia.” IOP Conference Series: Earth and Environmental Science 1217(1).
Kshaf, Dalia A, Mohamed A Mohamed, and Karim M El-Dash. 2022. “The Major Problems between Main Contractors and Subcontractors in Construction Projects in Egypt.” Ain Shams Engineering Journal 13(6): 101813. https://www.sciencedirect.com/science/article/pii/S2090447922001241.
Mbala, Mbuyamba, Clinton Aigbavboa, and John Aliu. 2019. “Causes of Delay in Various Construction Projects: A Literature Review.” Advances in Intelligent Systems and Computing 788(October): 489–95.
Mohd Fateh, Mohd Ashraf, and Alya Aiman Abdul Aziz. 2021. “The Cost Profile of Building Information Modelling Implementation in Malaysia.” Malaysian Construction Research Journal 14(3 Special issue): 109–24.
Mohd Fateh, Mohd Ashraf, Ruslan Affendy Arshad, S M A Marzuki, and M R Yusof. 2023. “IMPROVEMENTS OF THE COMMUNICATION BETWEEN CONSULTANTS AND CONTRACTORS DURING THE CONSTRUCTION PHASE IN MALAYSIA.” Planning Malaysia 21(2): 80–103. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85164312038&doi=10.21837%2Fpm.v21i26.1261&partnerID=40&md5=7dd4d2920cfd69c15a9701ebc7a6abd1.
Schleyer, Titus, Sarah Zappone, Candace Wells-Myers, and Todd Saxton. 2022. “Effective Interdisciplinary Teams BT - Clinical Informatics Study Guide: Text and Review.” In eds. John T Finnell and Brian E Dixon. Cham: Springer International Publishing, 285–306. https://doi.org/10.1007/978-3-030-93765-2_20.
Seddeeq, Abdulaziz Bin, Sadi Assaf, Abdullatif Abdallah, and Mohammad A. Hassanain. 2019. “Time and Cost Overrun in the Saudi Arabian Oil and Gas Construction Industry.” Buildings 9(2): 1–17.
Shiha, Ahmed, and Elkhayam M. Dorra. 2023. “Resilience Index Framework for the Construction Industry in Developing Countries.” Journal of Construction Engineering and Management 149(4): 1–16.
Ullah, K. et al. 2017a. “Theoretical Framework of the Causes of Construction Time and Cost Overruns.” IOP Conference Series: Materials Science and Engineering 271(1).
Ullah, K et al. 2017b. “Theoretical Framework of the Causes of Construction Time and Cost Overruns.” IOP Conference Series: Materials Science and Engineering 271(1): 12032. https://dx.doi.org/10.1088/1757-899X/271/1/012032.
WHO. 2020. “Coronavirus Disease (COVID-19) Situation Reports in Bnagladesh.” World Health Organisation: 1. https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports%0Ahttps://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports%0Ahttps://www.who.int/malaysia/emergencies/coronavirus-disease-(covid-19)-in-malaysia/cov (January 1, 2023).
Wu, Huiping, and Shing-On Leung. 2017. “Can Likert Scales Be Treated as Interval Scales?—A Simulation Study.” Journal of Social Service Research 43(4): 527–32. https://doi.org/10.1080/01488376.2017.1329775.
Yap, Jeffrey Boon Hui, Hamzah Abdul-Rahman, and Wang Chen. 2017. “Collaborative Model: Managing Design Changes with Reusable Project Experiences through Project Learning and Effective Communication.” International Journal of Project Management 35(7): 1253–71. http://dx.doi.org/10.1016/j.ijproman.2017.04.010.
Zamani, S. H., R. A. Rahman, M. A. Fauzi, and L. M. Yusof. 2021. “Effect of COVID-19 on Building Construction Projects: Impact and Response Mechanisms.” IOP Conference Series: Earth and Environmental Science 682(1).
Zhu, Lei, Hui Xiong, Yan Ning, and Miaomiao Lv. 2023. “Addressing Individual Perception: Extending the Technology Acceptance Model to the Interim Payment Method in Construction Projects.” Sustainability 15(9).
