Contractor’s perspective on the effect of late payments in Malaysian construction industry
List of Authors
  • Adnin Syaza Jaafar, Noraidawati Jaffar, Norakmarwati Ishak, Noraziah Wahi, Nur’Ain Ismail, Nurul Izzah Ismail

Keyword
  • Late payment, Contractors and Malaysian Construction Industry

Abstract
  • Late payments present a significant challenge in the construction industry, effecting contractors' financial stability and project success. This research investigates the effects of late payments on G7 contractors in Selangor, Malaysia, using data collected through a questionnaire survey. The data were analyzed using descriptive statistical methods with the latest version of SPSS. The research reveals that late payments most critically affect project timelines, leading to time extensions, delays in project completion, and disruptions in work programmes. These delays also contribute to cost overruns and can damage contractors' reputations. The findings underscore the importance of timely payments for maintaining cash flow, covering ongoing costs, and ensuring project continuity. Effective financial management, clear contractual terms, and regulatory measures such as the Construction Industry Payment and Adjudication Act 2012 (CIPAA) are essential to mitigating the negative impacts of late payments. The research highlights the need for industry-wide improvements in payment practices to enhance financial stability and project outcomes.

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