A Study on the Practical Development of Construction Industry Payment and Adjudication (CIPAA) Act 2012 in Malaysia Construction Industry

Lai, Chen Foong (2018) A Study on the Practical Development of Construction Industry Payment and Adjudication (CIPAA) Act 2012 in Malaysia Construction Industry. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

Payment problem are old age issue and had plagued the Malaysian construction industry for a long time. As a result, CIPAA 2012 was introduced to combat the negative payment culture in all levels of construction industry by providing a speedy dispute resolution. However, introducing a new form of dispute resolution is not without its challenges. Since it advert, CIPAA has entered into its third fiscal year. In spite of the positive data recorded by KLRCA showing upward trend on the adjudication application, some statistical result also shows the doubt on the enforceability of CIPAA. Related literature perceived low level of awareness toward CIPAA is the main factor causing industry players do not feel confident with the regime to make use of CIPAA. Therefore, first objectives of this research is to compare the level of awareness and willingness of industry in adoption of CIPAA 2012. Then second and third objectives were formulated to reveal the obstacles hindering the adoption of CIPAA 2012 and the challenges confronted by Adjudicator in using CIPAA 2012. A sample frame was retrieved from professional bodies in construction industry and stratified sampling was performed for Objective 1, quota sampling for Objective 2 and expert sampling for Objective 3. Both questionnaire survey and semi-structured interviews was administrated and responses was recorded. The data were analyzed with descriptive analysis, paired sample t-test and content analysis. Results revealed Malaysian construction industry are less dominant in willingness to adopt CIPAA 2012. The results also disclosed the obstacles affecting this phenomenon and also challenges confronted by the adjudicator in using this Act. The findings imply that KLRCA should look into the originate issue which are Malaysian culture in dealing with legal, quality of adjudicator and non-application of the Act in order to increase the willingness of adoption. To increase the effectiveness of the Act, a new revision would be anticipated, issue like lacking of expert witness must and competency of adjudicator must be well addressed.