Abstract:
The construction industry is a significant contributor to the national economy. Since
construction has been facing risk management issue, bonds and guarantees have become
a feasible solution, as a management too and mechanism. Professionals will have to
undertake consequential responsibilities in managing bonds and guarantees. However,
no significant efforts have been taken to identify how bonds and guarantees affect the
construction industry of Sri Lanka. This research aims to explore the challenges and
problems in bonds and guarantees, which are used in Sri Lankan construction projects,
and to make recommendations to projects in the Sri Lankan context. Initially, a literature
review has been carried out on different bonds and guarantees. Consequently, a mixed
research approach has been used, which included expert interviews and a questionnaire
survey. The collected data from expert interviews were analysed using content analysis
that supported the design of the questionnaire. To achieve the study's aim, the bonds and
guarantees were ranked against merits, demerits, issues, and suggestions in
questionnaires using a Likert scale, considering the significance of those competencies
in bonds and construction guarantees. The collected data were also analysed using the
Relative Importance Index The research findings are revealed that there are several
suggestions to overcome the barriers in bonds, guarantees and payment securities in Sri
Lanka. Additionally, contractors' requirement to set up a special guarantee fund to
protect business practices and it was identified as new suggestions that would aid the
challenges and problems in line with bonds and guarantees in Sri Lankan construction
projects.
