A Study of Payment Issues to Constructors in the Sri Lankan Construction Industry

Abstract

Payment issues to main contractors and the subcontractors have been a major concern in the construction industry. This research therefore, investigates the payment issues to constructors in the Sri Lankan construction industry. A survey approach using semi structured interviews was adopted. The research found delayed payments are mostly experienced than incomplete or non-payments. Government funded projects are highly exposed to delayed payments. Final payments are always delayed compared to retention and interim payments. Subcontractors are critically affected than main contractors. The findings indicated that the top three causes of delayed payments are paymaster’s poor financial management, delays in certification by consultants and improper bills from the contractors. The research therefore, recommended that parties need to procure appropriate security measures in the form of having a payment bond from the upper tier, separate form of contract to subcontractors and construction contract act. This would ensure that contractors get paid on time and thereby contribute to the success of the project.