Record Details

Causes of Payment Problems in the New Zealand Construction Industry

Construction Economics and Building

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Field Value
 
Title Causes of Payment Problems in the New Zealand Construction Industry
 
Creator Ramachandra, Thanuja
Rotimi, James Olabode Bamidele
 
Subject Construction Management
Payment problems, causal factors, factor analysis, construction, New Zealand.
Contract Administration
 
Description Payment delays and losses persist in the construction industry and continue to be a key concern to industry practitioners. Therefore an exploration of the key causes of payment delays and losses is undertaken in this study with the ultimate objective of seeking mitigating solutions. The study adopted a survey approach using an online questionnaire, administered to practitioners from the New Zealand construction industry, comprising consultants, head contractors and subcontractors. The data obtained was analysed using inferential statistical techniques, including comparing means and factor analysis. Factor analysis enabled clustering of the inter-related causes of payment delays and losses in order to find reduced number of causes. Accordingly, the study found that payment problems mainly relate to contractual issues, financial strength of industry players, disputes, short-comings of payment processes and ‘domino effects’. Among them, the financial strength of critical industry players was considered central to payment problems. The study concludes that any solution to these problems must address these primary causes, as a rational starting point. Thus procuring a feasible form of financial security at the outset of a project, and the pre-qualification of the financial status of critical project participants, were found to be significant in the mitigation of construction payment risks.Paper Type: Research article
 
Publisher UTS ePRESS
 
Contributor —
 
Date 2015-03-11
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
text/html
 
Identifier http://epress.lib.uts.edu.au/journals/index.php/AJCEB/article/view/4214
10.5130/AJCEB.v15i1.4214
 
Source Construction Economics and Building; Vol 15, No 1 (2015): Construction Economics and Building; 43-55
2204-9029
 
Language eng
 
Relation http://epress.lib.uts.edu.au/journals/index.php/AJCEB/article/view/4214/4515
http://epress.lib.uts.edu.au/journals/index.php/AJCEB/article/view/4214/4542
 
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Rights Copyright (c) 2015 Thanuja Ramachandra, James Olabode Bamidele Rotimi
http://creativecommons.org/licenses/by/4.0