Challenges in Processing Payment for Road Maintenance Works in Ghana

A typical challenge facing the construction industry in Ghana is late payment for work done. Many challenges and problems facing the construction industry in Ghana must be overcome in order to realize the goals of the industry. Making due payments on time for work done can contribute to project success. The aim of this research is to explore the challenges in processing payments for progress of work done by road maintenance contractors in Ghana. The specific objects of the research are to identify the challenges in processing payment for roads maintenance contractors, the effects resulting from these challenges in processing payment for road maintenance works, and to recommend strategies and measures that can help to minimizing these challenges during processing of payment for road maintenance works in Ghana. After an exclusive literature review, structured questionnaires were designed to elicit opinions from Public Servants, Contractors and Consultants in the construction industry in Ghana. Purposive sampling technique was adopted and out of the 60 questionnaires distributed, 50 were collected back depicting a response rate of 83.33%.The field survey data was analyzed using statistical representation. Relative importance index was the method adopted to analyze the research objective based questions. The factors were ranked from not importance (1) to very important (5). Findings were made after analyzing the data and discussions. The findings made include: Improper feasibility study before starting a project, government lacks of commitment for road maintenance, cumbersome procurement procedures; Non availability of funds in the budget by Government to confirm its commitment for road projects, and Government in power influencing payment are challenges facing payment processing in the Ghanaian construction industry. It’s also reveals that, poor project financing, project cost overruns and Diversion of fund for other government priorities are few of the effects resulting from these challenges faced in processing payment. In view of the findings of the study, it is important to re-direct efforts towards strategies to be adopted in our payment processing system in Ghana. The following recommendations are vital for improving the construction contract administration and payment processing in road maintenance. Government to expedite the implementation of the decentralization policy to effect payment at the district level to reduce the number of signatories in payment. The introduction of prompt payment Act in the construction industry. According to Goldstein, in 2003 this will act as Security of Payment to deserving contractors in road maintenance. Government must undertake projects which are budgeted; thus and avoid politicking issues regarding road infrastructure. Funds should be made available and released on time for road maintenance works in Ghana Improper feasibility studies into the availability of finance to complete a Project. There should be proper feasibility study into project scope before procuring it to avoid being locked up at the middle of delivery and implementation. With the above recommendations, it can be concluded that when payment processing are made effective, a substantial amount of the challenges facing contractors would be removed.

Source: KNUST