Analysis of the Causes of Delay in the Execution of Construction and Installation Contracts Contents

Delays in the execution of construction and installation contracts are a widespread issue in the global contracting industry, significantly affecting project timelines, costs, and stakeholder relationships. This study explores the complex causes of delays in construction and installation contracts, specifically emphasising Engineering, Procurement, and Construction (EPC) contracts within the petrochemical sector, a vital component of Iran’s economy. The research seeks to identify the primary drivers of delays, their consequences, and potential mitigation strategies by analysing global and Iranian case studies. Delays are classified into excusable (beyond stakeholder control) and non-excusable (stemming from stakeholder errors), with further distinctions between compensable and non-compensable delays. Key factors contributing to delays include inadequate advance payments, suboptimal engineering design, inefficient procurement processes, material shortages, contractor inexperience, and employer-related challenges such as delayed payments and change orders.<br><br> The study examines case studies from Nigeria, Saudi Arabia, the United Arab Emirates, Malaysia, and Iran, highlighting universal and region-specific patterns. In Nigeria, delays arise from poor financing and management, while in Saudi Arabia, awarding contracts to the lowest bidder often results in resource constraints. The UAE faces disputes over contract ambiguities and payment issues, and Malaysia struggles with contractor planning deficiencies. In Iran, delays are compounded by insufficient industrial infrastructure, lack of integrated management, and poor contractor selection. A detailed analysis of the Zagros Petrochemical project illustrates the severe financial impact of delays, with a 25-month delay leading to losses exceeding $2 billion against a $12 million contract. The study emphasises the importance of systematic project management, clear contract drafting, and stakeholder collaboration to mitigate delays. Recommendations include rigorous contractor vetting, progress-based payment schedules, and minimising change orders for employers, alongside meticulous planning and resource management for contractors. Given the limited research in Iran, further studies are needed to address local challenges and enhance project efficiency, particularly in the petrochemical industry.