Malaysian construction industry payment strategies for reform / Lim Chong Fong
The construction industry in Malaysia is a mature and significant contributor to the economy of the nation. There is ironically much exasparation and complaints on construction payment for work done, materials or goods supplied and services rendered. This disertation is therefore devoted to the ex...
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| Format: | Thesis |
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2009
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| Online Access: | http://studentsrepo.um.edu.my/9168/ http://studentsrepo.um.edu.my/9168/4/MA_AY_IA_ON_RUCTIONINDU_RYPAYMENT.pdf |
| Summary: | The construction industry in Malaysia is a mature and significant contributor to the economy of the nation. There is ironically much exasparation and complaints on
construction payment for work done, materials or goods supplied and services rendered.
This disertation is therefore devoted to the examination into the causes of the payment problems and to the suggestion of reform proposal to alleviate them. The
examination of the causes initially inquires into the operating norms of the construction industry. Against this background, the examination focuses on the
adequacy and effectiveness of construction contract term in use, the common law and statutory framework and dispute resolution procedure prevailing in the
construction industry. The examination is undertaken in this manner systematically commencing with the Malaysian position and followed by the positions in the United
Kingdom, Australia, New Zealand, Singapore, United States of America and Canada.
It is seen that the causes of the Malaysian construction industry payment problems are
five-folds, to wit, project finance, unfair contract terms, certification of payment,
withholding of payment and dispute resolution and security of payment. These causes
of the payment problems also occur but to varying degree in the other countries examined.
The experiences and solutions deployed by the construction industry of the other
countries provide the strategies that can be adapted for use in Malaysia. Based on the finding , the solution is a statutory one. The recommended strategy of reform
propsal is to combine the solution used in the United Kingdom, New Zealand and Singapore. This is done with necessary modification made to suit the Malaysian
construction industry environment coupled with the introduction of new ideas such as
the payment bond as security of payment. The strategy and solution for Malaysia is ultimately reduced into the proposed Construction Industry Adjudication and security of Payment Act.
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