Any economy's growth depends heavily on its construction industry.
This industry is one of
the most significant economic sectors in Malawi, increasing the country's GDP by 5.4%
annually since 2013 and creating a large number of employment since the beginning of the last
decade. () Since the National Construction Industry Council (NCIC) was established in 1967,
many civil and building contractors have registered, Lungu (2015) stresses that this is a sign
that the sector is thriving.
Perhaps more than any other industry, the construction industry is crippled by disputes
(Bekele, 2005). (Bahemuka, 2021) reports that 10% to 30% of all construction works
experience substantial disputes. (Mashwama et al, 2016) explains that disputes arise in
construction
Due to the complexity of the construction projects , the flaws in the design, and the large
number of people and firms required to complete a project. (Wesam S. Alaloul1, 2018)*
concurs with this an further exaplains that Conflicts are unavoidable in the construction sector
due to discrepancies in perspectives among project participants. Disputes quickly develop
from conflicts if they are not all likely managed eventually demand litigation, which may be
quite expensive for the parties involved (Thobakgale et al, 2015). (Musonda & Muya, 2015)
notes that a project's productivity and performance are gravely impacted during disputes,
which also add direct and indirect costs to the project.
Small and medium enterprise contractor are an emerging participant of the construction
industry in Malawi. A SME contractor is A small-scale contractor is typically characterized as
one who possesses little capital and may require financial and management help to
successfully run their firm (Kulemeka et al,2015). These contractors fall in the MK75 million
(building) and K50 million (civil engineering) category under the NCIC classification of
contractors (Chilipunder, 2010). SMEs are frequently recognized as the key to thriving
economies, and policy makers have turned their attention to them as a result of their perceived
role in creating jobs (Tavengahama et al, 2020). The utilization of SME contractors has been
encouraged by the Malawian government throughout the years (Chilipunde, 2010), and the
establishment of the National Construction Industry Policy in 2015 has encouraged the further
expansion of these contractors in the nation. Companies like Press Trust are known for
employing SME contractors for construction projects in all districts of Malawi()..Between the
2007/2008 and 2010/2011 financial years (FYs), Roads Authority contracted 1,327 SME
contractors to carry out road works..
SMME contractors encounter a number of obstacles and The fulfilment of the contracts during
construction is hindered by these constraints (Kulemeka et al, 2015). Charlson (2014) points
out that These constraints have placed SME contractors at legal risk of facing disputes.
litigation is the most traditional means of settling disputes, it is expensive and poses a danger
to the positive connections that the sector depends on for its prosperity. In order to provide the
industry a less combative means of dispute settlement, alternative dispute resolution methods
were established. ((Alaloul et al, 2019).
(Laubscher & Gaum 2019) outlines these methods abitration, adjudication, negotiation, mini
trial, conciliation, and mediation and these intend to help both parties resolve disputes. An
ADR used in the Malawian construction sector and integrated into forms of contract is
abitraction (Lungu, 2015). The Abitration Act of 1967 and the Abitration Rules, which
strengthen the State's constitutional duty to resolve disputes amicably as provided for in
Section 13 of the Constitution, serve as the method's guiding principles (Chonde, 2019).
Despite the existence of these techniques, litigation is occasionally still utilized to resolve
conflicts (Kirimi, 2019). Especially Where a judgment needs to be enforced, (Delhi, 2019).
The effectiveness of particular ADRs and the preference of ADR techniques in the
construction industry have been the subject of extensive research. Studies on SMEs in Malawi
have concentrated on the challenges that contractors face and the factors that hinder their
performance. However, there has been a gap in research on the application of ADRs by SME
contractors in construction projects in Malawi. Since disputes are now a common occurrence
in a sector that is also plagued by its own challenges, this study aims to evaluate the use of
ADR by SME contractors in construction projects.
What does the construction industry have (Bekele, 2005)
Construction is plagued, perhaps more than any other industry, with disputes due to the
inherent conflict of interest between the buyers of construction services
(Bahemuka, 2021)
The typical construction project is complex and lengthy, and given these variables, disputes
among parties often occur, expounded AAA(b) (2015, p. 4). Barkai estimated that significant
disputes arise in 10% to 30% of all construction project
(Thobakgale et al, 2015)
According to Love and Davis (2008), disputes are an endemic feature in the construction
industry. When not properly resolved, they may escalate and ultimately require litigation
proceedings, which can be extremely costly for the parties concerned, states Cheung et al
Disputes always affect the productivity and performance of a project and have direct and
indirect costs on the project
(Soni et al, 2017)
The construction industry itself a huge organization in which several construction participant
with different background, different knowledge and different mentality about the construction
industry
works together and all of these constructionparticipants work for a common motto, “To make
maximum profit.” With these differences in mentality, background and knowledge results in
clashing of ideas, thoughts and perception in any decision. Hence, conflicts in such situation
become inescapable or inevitable
(Musonda & Muya, 2015)
Indirect costs of a dispute, such as loss of productivity of the staff engaged in resolving the
dispute and interruptions to the daily activity of couped by the winning party. The losing side
often suffers heavy
losses that can lead to bankruptcy. Disputes can also ruin business relationships and
partnerships
Why are disputes common
Disputes are common in construction projects because of the complexity of the construction
process and the imperfect of the design and moreover, it takes so many individuals and
companies to construct a project (Mashwama et al, 2016)
(Wesam S. Alaloul1, 2018)*
The complexity of construction projects is continuously increasing which increases the
complication of contracts and the disputes probability that might arise at any stage in the
project lifecycle [1]. Therefore, disputes are almost unavoidable in construction projects
in the construction industry, because of contrasts in perceptions among the participants of the
projects, conflicts are inescapable. In the event that conflicts are not all probably managed,
they rapidly transform into disputes.
disputes quickly develop from disagreements if they are not all likely managed.
SMES
One of the participants in the construction industry are SMMES
(Paul John Kulemeka et al 2015)
A small-scale contractor is defined broadly as one with limited capital investment, who may
need financial and managerial support to effectively run his or her business
(Chilipunde, 2010)
The SMME contractors selected were members of the NCICM in the MK75 million (building)
and MK50 million (civil engineering) contractor categories and below.
(Tafara Herbert Tavengahama, 2020)SMEs are often cited in academic literature as the key to
vibrant economies and their perceived contribution to employment generation has made them
a focus for policy makers (Beaver & Prince, (2004) cited in Poku
Promotion of sme;
the Malawian government over the years have promoted the use of SME contractors
(Chilipunde, 2010) and the implementation of the National Construction industry policy of
2015 has promoted the further growth of these contractors in the country. Corporations such
as Press Trust are well known for contracting construction works to SME contractors (Press
trust) and international organisations such as USAID also encourage use of SMEs in
construction works.
(Paul John Kulemeka Grant Kululanga, 2015)between 2007/2008 and 2010/2011 financial years
(FYs), 1,327 were executed by SMC Road workss.
SMME contractors face a variety of constraints
(Chilipunde, 2010) SMME contractors face a variety of constraints Access to finance remains a
dominant constraint to SMME contractors in Malawi. Other constraints faced by the sector
include: lack of access to appropriate technology; the existence of laws, regulations and rules
that impede the development of the sector; weak institutional capacity and lack of
management skills and training. According to (Paul John Kulemeka Grant Kululanga, 2015)
these constraints inhibit the performance of the contracts during construction .
(Charlson, 2014)
Points out that SMEs contractors are at legal risk of facing disputes
These constraints have placed SME contractors at legal risk of facing disputes
Challenges:
(International Labour Organisation, 2019)
Some of the challenges that small scale contractors face as directly related to their own
capacities and operations in managing work
Disputes and ADR
(Alaloul et al, 2019)
Litigation which is simply the act of a lawsuit, is the most traditional form of resolving
disputes but this method is costly and threatening to damage good relationships that the
industry thrives on as such Alternative dispute resolution methods were introduced to provide
a less adversarial method of dispute resolution in the industry.
(Laubscher & Gaum 2019)
The Alternative Dispute resolutions methods include abitraction,adjudication,negotiation,mini
trial, conciliation and mediation and further explains the mechanisms and processes of ADRs
are designed to assist both parties in dispute settlement.
Lungu(2015)
Abitration is the an ADR that is used in the construction industry and incorporated into forms
of contract that are used. This method is guided by the Abitration act of 1967 and the
abitration rules enhancing the State’s Constitutional obligation to peaceably settle disputes as
provided for under Section 13 of Constitution. (zambia) (Chonde, 2019). Though these
methods exist in some instances litigation is still used being used to settle disputes (Kirimi,
2019). Litigation is preferred among parties when
there is a need for the decision to be enforced
litigation
seems to be a sought-after option to resolve disputes. (Delhi, 2019)
GAP
To effectively promote and intervene the use of ADR in the construction industry, the factors
influencing ADR selection and use need to be researched and fully understood. The
investigation of the ADR selection and use factors would assist in decision making and offer
practical guides for project practitioners (Lee et al, 2016)
However, very little research has been undertaken in understanding inhibiting factors to
performance of SMCs in the sub-Saharan region (Paul John Kulemeka Grant Kululanga, 2015)
There has been a considerable research done to determine Alternative dispute resolution used
in the construction industry and consistently the same variables are identified and continue to
manifest. However, the has been a gap in investigation of professional opinion within the
construction industry of the most preferred ADR used to resolve construction dispute
efficiently in Swaziland Construction industry. Disputes have become an endemic feature of
the Swaziland construction industry. Hence, this paper aims to evaluate the use of ADR to
resolve construction dispute in construction projects in Swaziland. (Mashwama, 2016)
This study sought to assess the real-world effectiveness of ADR in resolving disputes in the
construction industry in Uganda. Whereas previous studies on ADR in the construction
industry broadly focused on factors influencing the choice of suitable ADR technique during a
dispute, such a comprehensive study on the effectiveness of each ADR technique extends the
understanding of how ADR can be efficaciously deployed and therefore is of both academic
and practical value
There has been considerable research that has been conducted about ADR in the construction
industry, previous studies that tackled the effectiveness of specific ADRs and the preference of
ADR methods in the construction industry and studies on SMEs in Malawi have focused on
the constraints the contractors face and factors that inhibit their performance. However there
has been a gap in investigation of the implementation of ADRs by SME contractors in
construction projects in Malawi, Disputes have become an endemic feature of an industry
also riddled with its own shortcomings, Here this research aims to assess the implementation
of ADR by SME contractors in construction projects.
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