Analysis of delayed payments to contractors in public construction projects: a case study of the construction of the Sembabule Community Justice Centre

Abstract

In Uganda, delayed payments to contractors in public construction projects have been a common issue that affects the smooth execution and timely completion of such projects. This study analyzes these delayed payments to identify the factors contributing to the delayed payments and their effect on contractors in public construction projects using the construction of the Sembabule Community Justice Centre in Uganda as a case study. Through analyzing literature and project documents, the research identifies clients’ budget constraints, approval delays, delay in the valuation of work done, inaccuracies in contractors' claims, changes in policy of handling variations, and unforeseen circumstances like the COVID-19 pandemic as causes of delayed payments. These factors negatively affect the project timeline, and budget. The analysis also identifies the negative effects of delayed payments which include financial difficulties to the contractor, project delays, strained relationships with suppliers and workers, slow down and suspension of works, and loss of new opportunities. This research proposes remedies such as including contract provisions that allow contractors to receive extensions without penalty if payments are delayed, including contract provisions that specify the timeframe within which a project manager should approve the contractors’ submitted valuation of works done, contract flexibility to adapt to unforeseen circumstances with provisions for renegotiation of terms, and contractors providing all necessary accurate documentation for their claims. The findings of this research emphasize the importance of addressing delayed payments for effective public construction project management.