Strategies addressing payment delays in construction industry (Ghana)
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Date
NOVEMBER, 2015
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Abstract
In Ghana, construction is said to be one of the major contributors to the economy, and payment, becomes the central focus for both the contractor and the client. It is for this reason that understanding the subject of payments becomes crucial to both of them. Delayed payments causes severe cash flow problems especially to contractors resulting in the lock up of capital that is supplied from the company’s cash reserved or loans with high interest rate and also result in high rate of unemployment as a result of many construction contractors going on liquidation or bankruptcy. This study sought to identify the effects, existing strategies and explore innovative strategies to mitigate the effects of delayed payments. Deductive approach was used where literature was reviewed and Questionnaires developed to cover the objective of the study. Contractors with any class, Consultants and Experts were used as the population used for the population size. The research revealed thirteen (13) effects of delayed payment on contractors’ performance. Also thirteen (13) strategies currently in use by contractors were also discovered. The effects and strategies were found out to be significant after a ranking of their mean scores. Finally, ten (10) innovative strategies that can be adopted to eliminate delayed payment to contractors for government contracts were also proposed. It is strongly believed that the findings and recommendations from this study shall help mitigate the effects of delayed payment.
Description
A thesis submitted to the Department of Building Technology, College of Art and Built Environment,
Kwame Nkrumah University of Science and Technology in
partial fulfillment of the requirement for the Degree of Master of Science in Construction Management.