Tuesday, March 21, 2023

Factor Analysis on Causal of Construction Claims and Disputes in Indonesia (with Reference to the Construction of Hydroelectric Power Project in Indonesia)

AER vol 9


The main problem faced by construction industry in Indonesia is the disputes between the employer and the contractor as the impact of claim submitted by the contractor, especially in the public sector construction. Poor understanding of the contract, particularly the General Conditions of Contract is the main cause of disputes. Beside the other literature study, writer chooses the project completion reports of hydro electric power project in Indonesia as main source of information. The reason of choosing are because: First, the completion reports of hydro electric power project are the most comprehensive one, compared with other sector completion reports in Indonesia. Second, the hydroelectric power plant construction is complex, involving many kinds of engineering discipline in the construction of roads, bridges, buildings, tunnels and other underground openings, dams, intake structures, surge tanks, penstocks, turbines, gates, generators, switchgears etc. Third, it is involves a huge construction cost, that is why it mostly conducted under the loan from the international lender institutions, where in these construction projects there are some requirements to be fulfilled by the borrower e.g. the use of FIDIC Conditions of Contract is mandatory. This paper tries to find out the main causal factors of claims which lead to disputes from the point of view of each party involved in the project execution, i.e. the employer and the contractor, through distributing the questionnaire. Then the result is analyzed by the RII and Factor Analysis. The result of factor analysis showed that the most important main causal factor is inefficiency and disruption, therefore it could be considered as basic of discussion on all claims and disputes, because it relates to time and money and it could be quantified easily.
Keywords: claim, dispute, physical causal factor, main causal factor, conditions of contract.

Download: Ijaer v9 n22 2014 

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