Exploring into the Factors That Cause Payment Defaults: a Perspective of the Payment Dispute Cases in the Kenyan Construction Industry
Mark Obegi Kenyatta
Mark Obegi Kenyatta, MSC, B.Phil Tech. Department of Claims Management, Cost Estimating & Management, Project Management, Value Engineering & Construction Research Kenya.
Manuscript received on 15 February 2016 | Revised Manuscript received on 20 February 2016 | Manuscript Published on 28 February 2016 | PP: 36-42 | Volume-5 Issue-9, February 2016 | Retrieval Number: I2270025916/16©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Regular and timely payment is an important feature of the construction industry. Therefore failure to pay one or several certificates or invoices, paying in installments and sometimes not paying at all will undoubtedly cause cash flow hardships to those involved and may even bring the project work to an end. This study explores the factors that cause payment default in building and civil Engineering projects in Kenya. Primary document analysis of payment dispute cases lodged in the commercial courts in Kenyan was adopted. The study establishes that inadequate funding, variations, disagreements on the value of work done and defective work are the main factors that lead to payment default in their various forms. The study not only creates but also enhances awareness to all construction stakeholders in matters payment. It is therefore hoped that the awareness created will reduce the prevalence of payment default problems in the construction industry of Kenya.
Keywords: Payment, Cash Flow, Construction Industry of Kenya.
Scope of the Article: Construction Economics