#TITLE_ALTERNATIVE#

• Main Author: PRIBADI (NIM 25099122), TEGUH
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/24500
• Institution: Institut Teknologi Bandung

Small contractors count about 85 % of the total of about 100.000 Indonesian construdion organizations. Albeit small in term of total amount of sales, they play an important role in the national construction industry, employing more than 2.000.000 work force per year. They depend heavily on public sector projeds, thus suffering very much from the recent decline in public spending during the Indonesian financial crisis in the last 4 years. Indonesian small contractors are faced with limited financing capacity, resulting in the weakness in providing necessary working capital This condition is worsened by the fact that payment scheme and procedure set up in the general condition of contract of most public projects is very complicated and tends to disadvantage small contractors, even though providing advance payment on government projects is a general practice, part of government policy for supporting for small contractors. Small contractors are also facing difficulty in obtaining loans from financial institutions and banking industry, as they require complicated procedure for collateral. In addition, subcontractors, vendors and suppliers prefer more to deal with larger, bonafide contractors, rather than small contractors. They usually set up longer term suppliers' credit which improves remarkably large contractors' cash flow. Based on contractor and project owner survey, this research tries to identify small contractors cash flow structure related to various project and captures various issues related to their difficulties, in order to understand the problems related to their financing mechanisms. It is expected that better payment system can be devised to help improving their cash flow structure and their performance in general.