Effects of Delayed Payment on Projects and Stakeholders: A Case Study of Keta Municipal Assembly

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Delay payment is endemic in the construction industry and needs to be explicitly recognized as this problem recurs from project after project. Its’ alarming rate may go out of hand if measures are not put in place to curtail it. The researcher researched into the causes and effects of delayed payment on project and stakeholders. The objectives of the study are to identify the underlying causes of delayed payment that are characterized with the Keta Sea Defence and Resettlement Housing Units, establish the effects on projects and stakeholders and to determine effective solutions to mitigate these effects. The target groups of respondents were contractors with D1K1, D2K2 and D3K3 classifications, Keta Municipal Assembly and the direct project beneficiaries. The study was limited to Keta Sea Defense Resettlement Housing Unit projects at Adzido, Vodza and Kedzi. A deductive methodological approach was adopted for the study using literature review and surveys. Questionnaires and personal interviews techniques were used to collect data. Results from this study were analyzed using Statistical Package for Social Science (SPSS 11.0). Findings reveal that the main causes of delays are; poor financial arrangement by the clients, improper planning of projects, poor contractual relationship between parties, bureaucracy, political influence and delay in submission of claims by contractors. On the other hand, cost overrun, time overrun, total abandonment of projects and poor quality of work are effects on contractors, clients and projects. It was also revealed that, the ripple effects on projects beneficiaries (end users) includes; decline in economic activities of the people, poor living condition, insufficient accommodation readily available, denied of early use of project, fast spread of disease among households which claims lives and poor iv health conditions. It was recommended that, since direct beneficiaries of projects will continue to suffer the consequences of delayed payment in various ways and degrees, clients’ financial capacity and credit rating be made transparent to facilitate contractors to assess the employers' ability to pay for projects, projects should be well planned and must not be politicized. Conditions of contracts must be modified and balanced. Risk should be allocated evenly to all parties involved and be enforced.
A Thesis submitted to the Department of Building Technology, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Master of Science in Construction Management, 2014
Delayed Payment, Causes of Delayed Payment, Effects of Delayed Payment