Conditional payment invalidated and construction industry payment and Adjudication Act 2012 for a sustainable payment flow

The payment is said to be the blood line of the construction industry. Payment is a type of reward that is allowed to an organization or person as token for completing a certain task and is very important to be followed accurately on time to avoid problems in the industry. However, late and non-payment issue has never been away from the construction industry. There are many methods of payment being used by the main contractor to pay the subcontractors. Yet, one of the methods that has been identified to be culprit of payment issues to be used is the conditional/contingent payment or back-to-back payment method. The government established the Construction Industry Payment and Adjudication Act (CIPAA) to solve the payment issues. Yet, there are still documented cases where this conditional payment method is still being implemented in the construction industry. Thus, the aim of this research is to suggest the best ways to make sure the payment flow in Malaysia is sustainable through CIPAA implementation. In this study, the objectives of this research are to identify common payment issues in Malaysia construction industry, to investigate the main causes of payment issues in Malaysia construction industry and to determine the best solution in sustaining payment flow in Malaysia and implementation of CIPA Act 2012.