scholarly journals The Nature of Payment Problems in the New Zealand Construction Industry

2011 ◽  
Vol 11 (2) ◽  
pp. 22-33 ◽  
Author(s):  
Thanuja Ramachandra ◽  
James Olabode Rotimi
Keyword(s):  
New Zealand ◽  
Construction Industry ◽  
Cash Flow ◽  
General Construction ◽  
Court Cases ◽  
Significant Percentage ◽  
Construction Companies ◽  
Financial Obligations ◽  
Specific Construction ◽  
Property Developers

Delay and loss of payment is a serious problem in the construction industry of many countries. These affect the cash flow of contractors which is critical to meeting their financial obligations. Payment defaults by the principal leads to insolvency of contractors and in turn other parts of the project chain. In recognition of some of these problems, most countries have established payment-specific construction industry legislation and other contractual measures to mitigate the problems, but nevertheless the problem persists. In this context, the paper examines the nature of payment problems in the construction industry in New Zealand. It is part of a larger study, that seeks solutions to payment losses in the construction industry.The study uses two approaches; an analysis of liquidators’ reports, and an analysis of court cases involving payment disputes to determine the magnitude of payment problems on construction parties. The findings are presented using simple descriptive and interpretive analyses. The study finds that trade creditors are impacted negatively (payment delays and losses) by the liquidation of property developers, general construction and construction trade companies. 75% of trade creditors are unable to be paid fully by these categories of construction companies after liquidation proceedings. Liquidation proceedings take an average 18 months before they are finalised. The analysis of court cases found that 80% of payment disputes are between principals and contractors; with considerably significant percentage of disputes resulting in outright loss of payments. Only 40% of the cases are successful, in which case claimants are able to fully recover the amount in dispute. Payment losses are more prevalent in liquidation than delays and unlike in legal disputes, there is no security for those losses. The study finds that construction parties use remedies contained in the security of payment provisions within standard conditions of contract, and legislative documents.

scholarly journals An Analysis of the Use of Information Technology for Project Management in the New Zealand Construction Industry

2012 ◽  
Vol 1 (2) ◽  
pp. 47-56
Author(s):  
Suzanne Wilkinson
Keyword(s):  
Information Technology ◽  
Project Management ◽  
New Zealand ◽  
Construction Industry ◽  
Technology Use ◽  
Construction Projects ◽  
Alternative Methods ◽  
Construction Companies ◽  
Planning And Control ◽  
And Control

Effective information technology use can be a key cause of the success of a construction project. Technology used for project management in the New Zealand construction industry is discussed in this paper. The results reveal on many levels a lack of understanding of current available information technology to assist with overall management and control of the construction projects in New Zealand. This paper discusses the results of a survey to construction companies in the New Zealand which profess to offer project management as one of their main services. Amongst others, the findings suggest an awareness of the technology available, but a reluctance to invest time and money in it. The paper will assess the reasons for this reservation and provide advice for use of alternative methods for project management planning and control for the New Zealand construction industry. Valuable lessons from this research are translated to the international construction industry.

scholarly journals LATE PAYMENT ISSUES OF SUBCONTRACTORS IN MALAYSIAN CONSTRUCTION INDUSTRY

2020 ◽  
Vol 18 (11) ◽  
Author(s):  
Roziha Che Haron ◽  
Ahmad Lutfil Arazmi
Keyword(s):  
Construction Industry ◽  
Cash Flow ◽  
Research Methodology ◽  
Questionnaire Survey ◽  
Construction Projects ◽  
Standard Form ◽  
Survey Analysis ◽  
Construction Companies ◽  
Flow Problems ◽  
Research Findings

The practice of efficient and timely payment in construction projects is a major factor that can contribute to the success of a project. Delays in payment to subcontractor(s) by main contractor and client on construction projects in the Malaysian construction industry is considered to be a significant factor of concern. It causes severe cash flow problems to subcontractor(s) and this condition may lead to a devastating impact to the contractual payment chain. Withholding or delaying payment creates financial hardship for the construction companies and its impacts are sometimes so harsh that some companies have to close down their services. The research methodology adopted was the questionnaire survey analysis based on thirty (37) respondents from selected main contractors and sub-contractors in Gombak, Selangor. The data and information were also gathered from interviews analysis. From the research findings, among the factor of late payment from the client is payment withhold by the client. Meanwhile, the factor of late payment from the main contractor is when the term of “pay when paid” is applied. To improve the payment situation, the findings of this study suggest that there must be dedicated enforcing provisions for payment delay in contracts. This is proposed by introducing the standard form of contract clause regarding payment between the main contractor and domestic subcontractor which include levying charges on overdue payments.

scholarly journals The value-added tax implications of the temporary change in use adjustments by residential property developers: an international comparative study

2019 ◽  
Vol 18 (3) ◽  
pp. 46-65
Author(s):  
H Du Preez ◽  
A E Klein
Keyword(s):  
South Africa ◽  
New Zealand ◽  
South African ◽  
Cash Flow ◽  
Value Added ◽  
Residential Property ◽  
Value Added Tax ◽  
Residential Properties ◽  
International Comparative ◽  
Property Developers

Residential property developers sometimes struggle to dispose of newly built residential premises, because of an oversupply of residential property in the market and decreased sales in recent years. Many developers have switched from speculation (when residential properties are built to be sold) to investment (when properties are retained to generate rental income). Some developers only lease out newly constructed dwellings temporarily in anticipation of selling them later at a more favourable price. Units may be held with the ultimate goal of selling them, creating taxable supplies. In South Africa, these changes in the use of residential property have value-added tax (VAT) consequences that result in a negative cash flow. In the 2010 Budget Speech, amendments to the harsh VAT legislation were proposed. 6This study examined the South African VAT legislation applicable to property developers during the period when residential properties are let out. The findings suggest that the current South African VAT legislation relevant to changes in the use of residential properties is harsher than that in New Zealand or Australia, but that the proposed amendments offer some degree of relief. However, even with these amendments, there is insufficient relief, and another possible solution is proposed.

scholarly journals Trends of Adjudication Cases in Malaysia

2019 ◽  
Vol 266 ◽  
pp. 03001
Author(s):  
Quratul Ain Mazani ◽  
Siti Suhaidah Sahab ◽  
Zulhabri Ismail
Keyword(s):  
Dispute Resolution ◽  
Construction Industry ◽  
Cash Flow ◽  
Alternative Dispute Resolution ◽  
Court Cases ◽  
Resolution Method ◽  
Court Referrals ◽  
Settlement Of Disputes ◽  
Work Done

The construction industry is a fertile source of dispute. Payment disputes in the Malaysian construction industry are ancient issues that have been causing problems among construction players for decades. The settlement of disputes can be done by using the Alternative Dispute Resolution (ADR) in lieu of other alternatives or as a complement to Litigation. This paper is focused on Adjudication as a preferred dispute resolution method for the Malaysian construction industry. The enforcement of the Construction Industry Payment and Adjudication Act (CIPAA 2012) in 2014 is intended to provide swift dispute resolution and relief to unpaid construction industry claimants for work done, and facilitate cash flow in the construction industry as a whole. The purpose of this research is to establish the trends of adjudication cases that were intervened by the court within the period of April 2014 until February 2018, which is since the implementation of CIPAA 2012 in Malaysia. In order to determine a vast majority of matters that have been referred for adjudication under CIPAA 2012 and parties in dispute constitute the highest number of referrals, sixty-two court cases were identified. This research also reviewed previous case laws to identify the factors contributing to court referrals. Based on the review, most of adjudication cases in the Malaysian construction industry involve the Main contractor and Employer as dispute parties with the intention of challenging adjudication decisions as there has been excess of jurisdiction pursuant to Section 15 (d) applied by appellants together with the application enforcement of adjudication decision under Section 28 by respondents. The findings will be used as a platform to establish the dispute scenario of the Malaysian construction industry under the CIPAA 2012.

Assessment of Electronic Procurement Practices on Project Delivery, Case Study of Selected Construction Companies in Oyo State

2018 ◽  
pp. 257-266
Keyword(s):  
Construction Industry ◽  
Information Exchange ◽  
Ease Of Use ◽  
Project Delivery ◽  
Development Programs ◽  
Construction Firms ◽  
Construction Companies ◽  
Electronic Procurement ◽  
Ict Infrastructure ◽  
E Mail

This study investigated the use of e-Procurement in selected construction firms in Oyo state, Nigeria. The data were derived using a well-structured questionnaire survey involving 104 respondents. Descriptive statistical and correlation analyses were used to analyze the data. Findings show that the use of electronic procurement in the selected construction firms for carrying out procurement function is high with majority of the professionals affirming the use of the system, the four categories of e-Procurement used were e-mail, static websites, web.2.0 technologies and portals that have capabilities of supporting the execution of functions limited to intra and inter firm communication and exchange of project information and data. Consequently, between 84 percent and 76 percent of the respondents used these e-Procurement technologies for communication of information, exchange of bill of quantities, project reports, CAD drawings and project specifications. Consequently, factors with the highest positive impacts on the use of these technologies in the firms were the speed of transactions, lower transaction cost and ease of use. The study implies that the selected construction firms in Oyo state Nigeria predominantly use e-mails and websites to support the execution of pre-award phase of construction procurement. Finding also shows that there is positive relationship between e-Procurement (e-Notifying, e-Exchange, and e-Submission of bid) and Project delivery. The study suggests that to accelerate the rate of uptake of e-Procurement and maximize its benefits in the Nigerian construction industry, there is a need to improve the quality and quantity of ICT infrastructure across the country; and to embark on aggressive enlightenment campaigns, training and skill development programs in the use of e-Procurement in the construction industry in this country.

LATE AND NON-PAYMENTS ISSUES IN THE MALAYSIAN CONSTRUCTION INDUSTRY: PERSPECTIVE OF BUILDING MATERIAL SUPPLIERS

2020 ◽  
Vol 6 (1) ◽  
pp. 39
Author(s):  
Mohd Fisal Ishak ◽  
Kartina Alauddin ◽  
Mohd Shahrol Hafiz Ibrahim
Keyword(s):  
Construction Industry ◽  
Cash Flow ◽  
Financial Management ◽  
Building Material ◽  
Building Materials ◽  
Management Team ◽  
Flow Management ◽  
Cash Flow Management ◽  
Main Effect ◽  
Klang Valley

Payment in the Malaysian construction industry has generally been an issue of concern. Late and non-payment problem is endemic in construction and needs to be addressed. The aim of this study is to investigate the issues related to late and non-payment based on the building materials suppliers’ perspective. Questionnaires were distributed to suppliers of building materials in the Klang Valley. Findings from the study shows the main cause of late and non-payment is the paymaster’s poor financial management while the main effect of late and non-payment is problem with the cash flow.  The most recommended possible solution to cope with the issue is for the paymaster to conduct training on financial and cash flow management to the management team in the company.  

scholarly journals Delay in payment effects on productivity of small and medium construction companies in Oman: exploration and ranking

2021 ◽  
Author(s):  
Mubarak Al Alawi
Keyword(s):  
Cash Flow ◽  
Questionnaire Survey ◽  
Financial Stability ◽  
Construction Project ◽  
Internal Factors ◽  
Construction Productivity ◽  
Construction Companies ◽  
Productivity Rate ◽  
Delay In Payments ◽  
Productivity Factors

AbstractMaintaining a stable productivity rate in a construction project is a challenge. Many external and internal factors influence it. Delay in payment is one of the factors representing the project cash flow and mirrors the company’s financial stability status. This study explores the delay in payments effects on the construction productivity of the small and medium construction companies in Oman. Also, it ranks the delay in payment among other productivity factors. Sixty-five small and medium construction companies registered in Oman Tender Board participated in the questionnaire survey. The results showed that delay in payment significantly affects the financial stability of the companies. The delay in payment was ranked third out of 21 influencing productivity factors. The results were compared with a previous study that covered large construction companies in Oman. It was found that the rank of delay in payment in the small and medium construction is significantly higher than what was found in large companies.

scholarly journals Zero Carbon Building Practices in Aotearoa New Zealand

Energies ◽  
2021 ◽  
Vol 14 (15) ◽  
pp. 4455
Author(s):  
Thao Thi Phuong Bui ◽  
Suzanne Wilkinson ◽  
Niluka Domingo ◽  
Casimir MacGregor
Keyword(s):  
Climate Change ◽  
New Zealand ◽  
Construction Industry ◽  
Local Governments ◽  
Early Stage ◽  
Policy Implications ◽  
Structured Interviews ◽  
Building Projects ◽  
Aotearoa New Zealand ◽  
Zero Carbon

In the light of climate change, the drive for zero carbon buildings is known as one response to reduce greenhouse gas emissions. Within New Zealand, research on climate change mitigation and environmental impacts of buildings has received renewed attention. However, there has been no detailed investigation of zero carbon building practices. This paper undertakes an exploratory study through the use of semi-structured interviews with government representatives and construction industry experts to examine how the New Zealand construction industry plans and implements zero carbon buildings. The results show that New Zealand’s construction industry is in the early stage of transiting to a net-zero carbon built environment. Key actions to date are focused on devising a way for the industry to develop and deliver zero carbon building projects. Central and local governments play a leading role in driving zero carbon initiatives. Leading construction firms intend to maximise the carbon reduction in building projects by developing a roadmap to achieve the carbon target by 2050 and rethinking the way of designing and constructing buildings. The research results provide an insight into the initial practices and policy implications for the uptake of zero carbon buildings in Aotearoa New Zealand.

scholarly journals ENVIRONMENTAL MANAGEMENT SYSTEMS AS A DRIVER FOR SUSTAINABILITY: STATE OF IMPLEMENTATION, BENEFITS AND BARRIERS IN GERMAN CONSTRUCTION COMPANIES

2017 ◽  
Vol 23 (1) ◽  
pp. 150-162 ◽  
Author(s):  
Jan-Simon SCHMIDT ◽  
Rainard OSEBOLD
Keyword(s):  
Environmental Management ◽  
Construction Industry ◽  
Construction Materials ◽  
The State ◽  
Management Systems ◽  
Environmental Management Systems ◽  
Large Measure ◽  
Construction Companies ◽  
Ecologically Sustainable ◽  
Corporate Business

The construction industry, as one of almost every economy’s major generators of environmental impact, can contribute in large measure to achieving the goals of sustainability. However, most publications in this field deal with sustainability with reference to selecting construction materials and improvements in the operating phase of buildings. When considering ecological sustainability the focus has to be extended from the finished building to the building pro­cess. Therefore the actors of the construction sector who are responsible for the production process have to be studied: the construction companies. The goal of this paper is to study the state of ecologically sustainable corporate business management in construction. The state of application of elements of environmental management systems (EMS) is used as an indicator of the current situation in German construction companies. EMS can help continuously to environmen­tally improve the operating processes of the firms. A broad survey about the extent of EMS has been conducted consid­ering the barriers and drivers. In general, a relatively low interest in EMS and a lack of knowledge is noticeable within the sector. As a result, strategic recommendations are made on how to promote environmental management to foster sustainable thinking in the German construction industry.

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