An assessment of payment delays in public construction projects and its effect on project pre-financing in Ghana – case study, educational buildings

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Public building construction projects in Ghana construction industry are experiencing a wide spread of payment delays. The purpose of this study was to assess the factors causing delays and their effects on building construction projects in Ghana. Almost all the effects of delayed payments attributes were identified through detailed literature review. Structured interviews and questionnaire survey were conducted across stakeholders that included, among others, consultants, contractors and financiers to gather their views on the major source of funds for project pre-financing in Ghana; the major causes on delayed payments; how delayed payments affect contractors; how contractors deal with delayed payments and how delayed payment is affecting project pre-financing arrangements in the construction industry. The problem of the contractors and sub-contractors have is cash flow and mainly due to delayed payment which can severely affect the implementation and performance of any project. The objectives of this study are to identify the sources of funds for project pre-financing arrangements in the construction firms and the causes of delayed payment issues in construction projects in Ghana. Consultants, Financiers and D3K3-D4K4 construction firms were the target of the research and also a population of Medium to small categorisation of construction firms were considered within the study area of Accra. A targeted sample size of fifteen (15) participants: five (5) from the construction firms in building as well as additional five (5) from consultants and (5) project financiers. In conclusion it was noted that the recipient of the repercussions of payment delays and its associated cost is the society who are the end-users of the projects. However, this research did not capture their views on the subject matter. It would be interesting for future researchers to find out their perceptions with regard to the subject matter. The findings from this study would be valuable for all construction professionals.
A thesis submitted to the Department of Building Technology, College of Art and Built Environment in partial fulfilment of the requirements for the degree of Master of Science, 2016