A STUDY ON THE USE OF DISPUTE BOARDS ON LARGE-SCALE CONSTRUCTION PROJECTS IN INDONESIA (CASE STUDY: JAKARTA MRT PHASE 2A PROJECT)

• Main Author: Fadhil Nugroho, Rafi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83365
• Institution: Institut Teknologi Bandung

The construction services industry has complex characteristics and a high level of uncertainty, especially when it comes to large-scale construction projects. These large-scale projects often require Joint Ventures (JV) from various parties to handle the project complexity, which makes project organizations less autonomous and complicates decision-making. Construction disputes lead to increased costs and project delays, decreased productivity and trust, and damaged business relationships. Dispute resolution through litigation and arbitration is deemed unsuitable for construction disputes due to the significant resources required, the potential to harm business relationships, and the technical nature of construction disputes. On the other hand, dispute resolution methods such as negotiation, mediation, and dispute boards have lower costs and tensions, as well as provide parties with greater control over the outcome. The dispute board is an independent institution that is formed at the beginning of a project,so it can play a preventive role by identifying potential disputes and understanding the characteristics of the construction project. It also resolves arising disputes to prevent from escalating into longer and more expensive disputes. The dispute board is considered to be an alternative for preventing and resolving disputes in construction projects caused by the interaction between industry and project characteristics, and the need for immediate resolution. The use of dispute boards have not been widely used in construction projects in Indonesia, one large-scale project that has utilized a dispute board is the MRT Jakarta Phase 2 project. Therefore, it is necessary to study the use of dispute boards in large-scale construction projects in Indonesia using the MRT Jakarta Phase 2A project as a case study. The aim of the research is to identify the advantages, disadvantages, opportunities, challenges, and strategies for using dispute boards in Indonesia. Respondents include project owners and contractors involved in the MRT Jakarta Phase 2A project. The research employs internal factor analysis (strengths and weaknesses) and external factor analysis (opportunities and threats) to develop a SWOT matrix, which is then used to formulate strategies for using dispute boards. Based on the study results, the strength of using a standing dispute board provides escalation prevention and increases the effectiveness of dispute resolution by ensuring time and cost certainty. Meanwhile, the weakness of using a dispute board, either standing or ad hoc, are the additional costs that are quite large in the hearing process. The opportunities of using a standing dispute board on construction projects in Indonesia can meet the needs for dispute resolution during the project through quick resolution, maintaining relationships between the parties, and providing a win-win solution. Meanwhile, the threat of using a standing dispute board on construction projects in Indonesia are the lack of awareness about the importance of dispute prevention, reluctance of project owners and contractors to incur dispute costs at the beginning of the project, and the limited number of qualified dispute board members are major hurdles. Strategies to promote the use of dispute boards in Indonesian construction projects include encouraging their use through regulation, particularly for large-scale projects, maximizing the role of dispute boards as preventive and resolution mechanisms, and granting one party (either the project owner or contractor) the right within the contract to mandate the use of dispute boards for upcoming projects.