Late Payment Issues in the Malaysian Construction Industry

Yap, Lai Sian (2023) Late Payment Issues in the Malaysian Construction Industry. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

Regular and timely payment in the construction sector is one of the key factors to the success of the construction project. Without consistent injection of the payment by the employer, the contractor will face the cash flow difficulty. This situation shall be avoided because it will cause a series of domino effects. Over the years, the payment issues are common in the Malaysian construction industry. As the complexity and scale of the construction project increase, the late payment issue becomes more common and critical. There are many payment-related disputes in both public and private projects. The contractual parties, in this case both the employer and the contractor will pay a heavy price for the late or delayed payment by the employer. Therefore, the main aim of this research is to address the late payment issue in local construction. Specifically, this research will look into the late payment scenarios in the construction contracts. After that, previous research regarding the causes and mitigation measures of the late payment will be analysed to achieve better resolution. It is found that the reasons for late payment may be contributed by either the employer or the contractor. Besides, this research also studies the ways to eliminate the late payment by the employer, before it happens. To collect the latest data regarding this research title, a questionnaire survey is conducted and receive 119 responses. The research findings and discussion has been drawn out and it is expected to outline the late payment issue in the Malaysian construction industry