Payment Disputes in the Construction Industry in Malaysia

Ping, Zhiow En (2018) Payment Disputes in the Construction Industry in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

A construction project always involves a huge amount of money and different parties. Hence, the payment issue that happened between the parties will become the major dispute in the construction industry in Malaysia. This problem is still remaining inveterate in the Malaysian construction industry and results impacts to the project and also the related parties. This research seeks to discover causes of payment disputes. It attempted to find out the most frequent cause that results to the happening of disputes and the effect of different company background to the causes of disputes. Likewise, this this study is covered on identifying the effects to the construction company if there is a payment dispute happened. The dispute resolutions to solve the payment issues are determined and the most effective resolutions are found out. To overcome the payment issues in the construction industry, the Construction Industry Payment & Adjudication Act (CIPAA) 2012 had been enacted by the Construction Industry Development Board (CIDB) Malaysia that act as a speedy dispute resolution, provide remedies for recovery of payment in the construction industry. This research was assessed by 61 construction practitioners in the method of questionnaire surveys. The survey indicates the major cause of payment dispute is delayed payments by the contracting parties. However, the causes of the payment dispute do not depend on the company background. Then, the biggest consequence that caused by the dispute is the extra costs, which used to solve the issue. Negotiation will be the preferred method used to solve the dispute. Besides, the construction parties in Malaysia are not aware and good use to the CIPAA 2012 that enforced since 2014 to solve their dispute as they may fully understand the features and the convenient that bring by the act. Lastly, this research is studying the payment issues in the construction industry so that improvement can be made base on the issue.