Payment Issues in Malaysian Construction Industry

Chang, Suet Yee (2011) Payment Issues in Malaysian Construction Industry. Final Year Project (Other), Tunku Abdul Rahman University College.

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Abstract

Construction industry contributes significantly to the Gross Domestic Product (GDP) in Malaysia and therefore payment has been concerned by the Government. As the delayed or non-payment issues had brought negative image to the foreign investors towards the local construction industry, there is an urgent need to resolve such payment issues in order to recover the country reputation and attract more foreign investors. In the perspective of Contractor, payment is the most important component of any construction projects to ensure the success of projects. The Malaysian construction industry is proved to suffer from serious payment issues involving late and/or non-payment stated by Construction Development Industry Board (CIDB). The study was conducted by literature search and using case study approach as the research methodology. The case study carried out in focusing the perception of Contractor when facing payment disputes based on an arbitration case and a court case. The discussion part revealed the findings obtained through case study and achieved the study objectives which are factors of payment issues, impacts to the construction industry and actions taken to secure the Contractor‟s payment debt. In the conclusion part, few recommendations provided to the third party for improving the current modes of disputes resolution regarding payment issues. The overall study can be utilized to assist the Government and others involved in the construction field in resolving the payment defaults and bring Malaysia towards globalization in this field.