Effects of late payments to small contractors in Malaysia
List of Authors
  • Hazrin Hazizi Hussain Sabri

Keyword
  • construction Industry, contractors, financial, late payment

Abstract
  • The construction industry plays a vital role in any country’s development process; it is both growth-initiating and growth-dependent. Payment issue in the construction industry has been considered a factor of significant concern to all the players in the industry. The aim of this study is to investigate the effect of late payments due to various factors faced by the small contractors in the Malaysian construction industry. The survey questionnaires were designed to address the objective that has been outlined. The G1, G2 and G3 contractor have responded to the questionnaires. The finding of the research indicates that the potential major factor of late payment among contractors was due to paymaster’s poor financial management with financial hardship was the effect of late and non-payment. The findings of this study provide an insight on the issues of late and non-payment and the study also proposes a remedy to cure this problem.

Reference
  • 1. Abdul-Rahman, H. & Berawi, M.A. (2006). Delay Mitigation in the Malaysian Construction industry, J. Constr. Engrg. and Mgmt., Volume 132, Issue 2, pp. 125-133 (February 2006). American Society of Civil Engineering.

    2. Abd. Majid M.Z. and Ronald Mc Caffer. (1997). Factors of Non Excusable Delays that Influence Contractor's Performance. Journal of Construction Engineering and Management,ASCE.

    3. Ameer Ali, N.A.N. (2005). Payment in The Construction industry – towards Zero- Default, QS National Convention 2005, 10 – 11 August 2005, Hilton Kuala Lumpur.

    4. Arditi, D., and Chotibhongs, R., “Issues in subcontracting practice,” Journal of Construction Engineering and Management, ASCE, 2005, 131(8), pp. 866-876.

    5. Bryman, A.,& Bell,E. (2003). Business Research Methods. Oxford University Press.

    6. CIDB (2004). Construction Act Consultation: "Improving Payment Practices", 14 October 2004 [Retrieved August 8, 2005]

    7. CIDB (2006). “A Report of a Questionnaire Survey on Late and Non-Payment Issues in the Malaysian Construction Industry, March 2006

    8. Chen, H. L. & Chen, W. T. (2005). “Clarifying the Behavioural Patterns of Contractor Supply Chain Payment Conditions,” International Journal of Project Management, 23, 463-73.

    9. Che Munaaim, M. E. (2009). The security of payment regime in Malaysia: will it be effective? Paper presented at the Construction and Building Research Conference of the Royal Institution of Chartered Surveyors, University of Cape Town.

    10. Fong, L. C. (2005). The Malaysian Construction Industry - The Present Dilemmas of Unpaid Contractors.Master Builders, (4th Quarter), 80-82.

    11. Hasmori M F, Ismail I and Said I (2012) “Issues of Late and Non-Payment Among Contractors in Malaysia”, 3rd International Conference on Business and Economic Research Proceeding, 12-13 March 2012, Golden Flower Hotel, Bandung, Indonesia.

    12. H. Singh, Construction of contingent payment clauses: Is there light at the end of the tunnel, Malayan Law Journal Articles, 2006, Kuala Lumpur

    13. Judi S S and Abdul Rashid R (2010) “Contractor’s Right of Action for Late or Non-Payment by the Employer.” Journal of Surveying, Construction & Property 1: 65-95.

    14. Mohamad F M, Nekooie M A and Che Kamaruddin N (2012) “The Adequacy of Contractual Provisions in Managing Construction Failure in Malaysia.” European Journal of Business and Management 4: 22-37.

    15. Oon Chee Keng. (2005). Pay When Paid Clauses. 7th Surveyor’s Congress. Kuala Lumpur:Sin, Payment issues – The present dilemmas of Malaysian construction industry, Unpublished Masters Dissertation. Universiti Teknologi Malaysia, 2006.

    16. Suhaini, A. (2005). No joy for the small builders. The Star online, 8 May 2005.

    17. Supardi, A., Yaakob, J., & Adnan, H. (2009). Performance Bond: Conditional or Unconditional. Paper presented at the 2nd Construction Industry Research Achievement International Conference, Legend Hotel,

    18. Supardi A, Adnan H and Mohammad M F (2011) “The adequacy of Malaysian security of payment legislation for sub-contractors in construction industry”, Sixth International Conference on Construction in the 21st Century, 5-7 July 2011, Kuala Lumpur, Malaysia.

    19. Morgan, G., & Smircich,L,. (1980). The Case For Qualitative Research. The Academy of. Management Review, 5(4),491-500.

    20. Murdoch, J. & Hughes, W. (2000). Construction Contracts – Law and Management, (3rd Ed.), Spon Press, Great Britain, London.

    21. Nicholas, N. (2005). Late payment culture creates domino effect. Accountancy Age , 30 Jun 2005 [Retrieved February 13, 2006]

    22. Odeh, A. M. & Battaineh, H. T. (2002). “Causes of Construction Delay: Traditional Contracts,” International Journal Project Management, 20, 67–73.

    23. Odeyinka, H. A. & Kaka, A. (2005). “An Evaluation of Contractor’s Satisfaction with Payment Terms Influencing Construction Cash Flow,” Journal of Financial Management of Property and Construction, 10(3), 171-80.

    24. R Rietveld, T. & Van Hout, R. (1993). Statistical Techniques for the Study of Language and Language Behaviour. Berlin- New York: Mouton de Gruyter.ietveld& Van Hout 1993),

    25. Reeves, K. (2003). 'Pay Up,' JUBM Construction News and Views, 1/2003, 4-6.

    26. Rourke, J.W. & Gentry, C A. (2002), Missollri Pro/1/ pt Payment Laws Appli cable to Construction Projects, Journal of the Missouri Bar Vo l58 (3) {O nli ne] Ma y-June 2002 [Rc trieved September I, 20051

    27. Robert V.K, Darley W.M., (1970) Determining Sample Size For Research Activities, Educational And Psychological Measurement, Vol. 30,609-610.

    28. Sears, S. K., Sears, G. A. & Clough, R. H. (2008). Construction Project Management, 5th ed., Wiley, Englewood Cliffs, NJ. Service Circular Number 3. (1998). 'Guidelines Provision and Receiveables Gifts in Civil Service,' Malaysia.

    29. Sin, Payment issues – The present dilemmas of Malaysian construction industry, Unpublished Masters Dissertation. Universiti Teknologi Malaysia, 2006.