INVESTIGATION OF CAUSES AND EFFECTS OF PAYMENT PROBLEMS AND ITS SOLUTION IN PUBLIC BUILDING CONSTRUCTION PROJECTS

Main Advisor: Dr. Lucy Feleke (PhD) Co-Advisor: Mr. Ashenafi Olana (MSc.) Abstract The construction industry is known for many unique characteristics which could primarily contribute to payment problems. Such problems have been widely acknowledged for more than four decades by previous research and the problems associated with the lag of the project will depend on the appropriate use of finance or budget and time. The general objective of the study was investigation of Causes and effects of payment problems by go proposing how to shown up its solution in construction Projects. The study was focused only on public building construction projects in western Oromia region in Nekemte city. To carry out this research Descriptive survey design was used which involves mixed-qualitative and quantitative type of research. The primary sources of data are collected from respondents through a questionnaire, observation, and interview while the secondary data are collected from reviewed literature and related documents. A non-probability purposive sampling technique was used to select a representative sample from the population for the questionnaire. Descriptive statistics involving frequency distribution and Relative importance index was used to analyze the responses obtained from the collected questioners and Statistical Microsoft families excel was used to process and analyze the data. The result revealed that, all respondents ranked incorrect change order disputes, incorrect billing, the employer"s failure to finance the project, inadequately prepared specification and BOQ, time overrun of projects, and disagreement in valuation of work completed as Causes of payment problems in construction Projects were ranked from 1st to 6threspectively. As the effects of payment problems, Creates a negative chain effect on other parties, Creates cash-flow problems, leads to abandonment of projects, Conflict among parties involved, Creates financial hardship, and Results in formal dispute resolution e.g. litigation/arbitration were ranked from 1st to 6th with the RII value of 0.66, 0.68, 0.62, 0.67, 0.66, and 0.62 respectively. The Causes of payment problems in construction Projects have an impact on project"s success on delivery system, change order, the employer"s failure to finance the project, wrong BOQ, project duration beyond scheduled and inappropriate preparation of bid document are the reason for incompetence of contractors in lowest bidding system. All stakeholders of the project should reoriented In most of the inadequate design, poor site management, inadequately prepared BOQ, poor estimating and lack of cost control measures. Key words: -payments, problems, project, construction, cause effects, etc.