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Security of payment in Malaysian construction industry: issues on sub-contract's direct payment

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  • Supardi, Azizan
  • Adnan, Hamimah
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    Abstract

    In Malaysia, sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment. However, „direct payment‟ provision is applied for in most of the nominated sub-contracts and not to the domestic sub-contractors; thus the Construction Industry Payment and Adjudication (CIPA) Act is proposed. This paper, though, is to disclose the findings on legal cases and sub-contractors‟ perspective on direct payment, by preliminary analyzing the quantitative questionnaire survey to the first 81 from the identified 1,500 sub-contractors throughout the country. Before that, from 186 cases, only 5 selected cases are analysed that thoroughly addressed the judgment of direct payment. It is found out that the particularly small sized subcontractors are definitely need to enhance their knowledge of the so-called the „Security of Payment‟ Regime to benefits from the proposed Act.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 34023.

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    Date of creation: 26 Aug 2011
    Date of revision: 26 Aug 2011
    Handle: RePEc:pra:mprapa:34023

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    Keywords: Malaysia; Legal readiness; Sub-contractors; Security of payment; Construction industry;

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    1. Supardi, Azizan & Adnan, Hamimah & Mohammad, Mohammad Fadhil, 2011. "Security of payment regime in construction industry: are Malaysian sub-contractors ready?," MPRA Paper 34025, University Library of Munich, Germany, revised 2011.
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