Payment Issue in Malaysian Construction Industry: Contractors’ Perspective

Abstract

This paper research entitled “Payment Issue in Malaysian Construction Industry by Contractor” intends to investigate the causes of late and non-payment in the Malaysian construction industry. Payment problems are old age issues that permeate the Malaysian construction industry. So often, contractors and parties in the construction industry complain either not getting paid or payments have been unduly delayed by the employer. A preliminary study was undertaken of 100 samples of contractors. The findings of the research shows that the potential major causes of late and non-payment are local attitude, delay in certification by consultant and paymaster's poor financial management. Based on the factor analysis findings, there are three factors that should be taken care which are under factor management and documentation, communication and contract, and culture and attitude. Findings of this study may assist the government and relevant parties in addressing problems associated to late and non-payment in an effective and timely manner to create a win-win situation for all parties in the Malaysian construction industry. The findings will be used as a platform in establishing the payment scenario in Malaysian construction industry prior to Construction Industry Payment Adjudication Act (CIPAA).