Contractors’ Approaches to Risk Management at the Construction Phase in Malaysia

Abstract - Often times, contractors failed to identify, plan, strategize, analyzed, execute, monitor, control and manage the risk involves during construction phase in Malaysia. Consequently, the contractor failed to complete the project on schedule, within client’s budget and quality. The idea of introducing formal risk management among Malaysian contractors during construction phase is seem to be a proactive approach to achieve the project objectives. This paper intends to identify the application of formal risk management among the contractors during the construction phase in Malaysia. Questionnaires and interviews were used. It was found that although the risk management process in Malaysian construction industry has been introduced, most of them are not well structured and not being implemented in a formal manner. Therefore, it is suggested that these contractors should try to implement formal risk management and hope that the construction industry in Malaysia can enjoy the benefits and lead our industry effectively into the next stage of building the nation.Keywords : Risk Management, Contractors, Construction Phase, Malaysia

Assessing causes of contractual disputes from different type of condition of contracts

In a construction industry, a Condition of Contract (CoC) is primarily used to ensure a project can be delivered successfully with minimum disputes. The contractual disputes rooted from many factors, including from the improper management of conflict between parties in the project, misinterpretation of the CoC, lack of documentation, and discrepancies and ambiguities of documents which may lead to as cost overruns, project delay and project cashflow. Thus, a comprehensive CoC plays a significant role to express the rights and obligations of the main contracting parties. CoC functions in stating to each party on what they shall do and to the extent of their entitlement of rights and obligations under the contract. Despite having various of published CoC such as PAM Contract and series of PWD Form of Contract to govern the construction projects, numerous construction cases in relation to contractual disputes are still increasing over the years and there has been little discussion about the causes of disputes. It indicates the ineffectiveness of the contract provision in the CoC. Hence, this study presents thorough review of the disputes occurs in the construction industry by outlining the issues raised in the court cases. This scenario has paved this paper to achieve the objectives of the research, including to identify the factors attribute to the construction dispute and to investigate the provision in CoC that caused the contractual disputes. The data collection used was mainly through literature synthesis and surveys. The results revealed that there are five attributes of construction disputes. The findings of the paper would be beneficial to practitioners in increasing their awareness of the flaws in the CoC and could be helpful in mitigating the disputes

Late payment issues of subcontractors in Malaysian construction industry

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

Acceptability of the concept of shariah compliant procurement in the Malaysian construction industry

Construction procurement is a process of acquiring a construction project and it is very crucial for the success of any projects. In the past and present, majority practice of procuring projects in Malaysia are involving interest, uncertainties, gambling and other prohibited matters. Therefore, the concept of Shariah compliant procurement has been introduced as a new paradigm in the construction industry to overcome those problems. However, the Malaysian construction industry has not fully adopted the concept of Shariah-compliant in construction procurement where the only infused parts are funding and insurance and there is a potential for the concept to be fully adopted as it is happening in various industries like banking, tourism and others. In spite of that, there is always a question whether the Shariah compliant can be fully embraced in the Malaysian construction industry. Therefore, a study to investigate the acceptability of the construction players on the concept of Shariah compliant procurement is carried out. The study is conducted by a combination of literature review and survey with the players in the construction industry. The outcome of the study indicates that construction players are going to accept the concept of Shariah compliant construction procurement though theirs understanding is at moderate level and some of them do not understand at all the concept

Risk cost analysis in Malay heritage conservation project

Risks in conservation projects are believed to be different from risks in new building projects. There are different methods and processes that need to be adopted in order to handle a conservation heritage project. Heritage projects form a valuable inheritance with sentimental values that tell a certain history, culture or tradition which needs to be preserved. Nevertheless, many have reported that conservation projects frequently suffer failures in meeting the delivery goals of time, quality and budget, which lead to contractual disputes during the postcontract stages of a conservation project. Conservation work is riskier due to the inclusion of many activities such as preservation, restoration, and refurbishment. Thus, this research aims to identify the risk cost analysis in carrying out conservation projects through conducting semi-structured interviews and using the survey research method. The objectives are to highlight the importance of conserving Malay heritage and identify risk affecting cost of conserving heritage buildings. This research applied strategy survey through semi-structured interview and questionnaire survey. It was found that project risk consists of hidden works and uncertainties is the highest among other risk categories. The outcome of this research is considered to be significant and relevant as it contributes towards the conservation sector by minimising the risk of cost analysis taken on conservation projects by the project team involved

Open space development planning in Malaysia: Issues and problems

This study aimed to identify and understand the problems faced by local authorities in the development planning of open spaces in Peninsular Malaysia. The study focused on the issues and problem encountered by 98 local authorities in that are governed under the Town and Country Planning Act 1976 (Act 172). To obtain information on the preparation of open spaces that involves development planning, and policy enforcement, questionnaire survey was distributed to 456 respondents which obtained a response rate of 52.6% (n=240). The study found that the availability of land, lack of funding and policy compliance are the main obstacles hindering local authorities to provide better service to the public. This study recommends several measures to address the issues in the hope that it will help the local authorities to better manage and provide long term sustainable open spaces

Quantum meruit claim in conservation projects

Quantum meruit claim is an ordinary claim that arises in the construction industry which is compensated for works and labor where no price has been agreed in the contract. Most of the quantum meruit claim cases drawn by the court rulings were focusing on the practice of new construction projects only. Currently, the quantum meruit claim is little known in the construction industry especially for the conservation projects. Conserving an existing building involves inaccurate pre-determined works in terms of extent, specifications, duration, and cost. There are many major drawbacks and limitations of conserving a heritage or old building which will thwart the process of quantum meruit claim. This systematic review article focuses on the use of quantum meruit claim in conservation projects. The objective of this study is to investigate the limitation factors of quantum meruit claim in conservation projects. This study adopted Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) by utilizing an online database. Accordingly, 20 articles and 23 precedent court cases were resulted to be analysed systematically. This study managed to develop 4 limitation factors of quantum meruit claim for conservation projects which are (i) non- availability of contract, (ii) undetermined price, (iii) lack of experiences and skillful parties, and (iv) improper documentation provided for conservation projects. Eventually, two recommendations for the use of future researchers were presented at the end of this research

Contractors’ Approaches to Risk Management at the Construction Phase in Malaysia

Abstract - Often times, contractors failed to identify, plan, strategize, analyzed, execute, monitor, control and manage the risk involves during construction phase in Malaysia. Consequently, the contractor failed to complete the project on schedule, within client’s budget and quality. The idea of introducing formal risk management among Malaysian contractors during construction phase is seem to be a proactive approach to achieve the project objectives. This paper intends to identify the application of formal risk management among the contractors during the construction phase in Malaysia. Questionnaires and interviews were used. It was found that although the risk management process in Malaysian construction industry has been introduced, most of them are not well structured and not being implemented in a formal manner. Therefore, it is suggested that these contractors should try to implement formal risk management and hope that the construction industry in Malaysia can enjoy the benefits and lead our industry effectively into the next stage of building the nation

The challenges of quantity surveying practice in sustainable construction project

Sustainable construction has led to changes in the complex environment of the construction industry. Globalisation has created to a new paradigm of sustainable practice resulting in growing demand for green construction and sustainable development. Nevertheless, since the understanding of sustainable construction in Malaysia is still in its infancy, quantity surveyors are struggling to respond to the green demand. This paper investigates the challenges facing quantity surveyors in managing green construction projects based on stages of project development. The findings show that quantity surveyors face numerous challenges brought by various factors during the management of these projects. This paper contributes to the body of knowledge of the green building environment by providing useful finding to serve as a reference for the stakeholders within the industry and the quantity surveyor specifically in entering green construction

Potentials of technical tours for special interest tourists in Kuala Lumpur

Within the last ten years, there has been growing attention to Special Interest Tourism (SIT). This article examined the sites in Kuala Lumpur that have potentials to attract built environment professionals and design enthusiasts. This study uses secondary data from technical tours, tour packages and attractions offered by various agencies. The data gathered are mapped, tabulated and analysed. The findings revealed that Kuala Lumpur has potentials to promote 58 sites in the city for Special Interest Tourism. These results may help professional bodies, destination managers, tourism operators and site/building owners to enhance and position their sites as attractions for SIT