Effects of Payment Delays on Contractors’ Cash Flow:A Case of Tanzania Rural and Urban Roads Agency.

Elia, Elihuruma (2025) Effects of Payment Delays on Contractors’ Cash Flow:A Case of Tanzania Rural and Urban Roads Agency. Masters thesis, The Open University of Tanzania.

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Abstract

This study was carried out to find out the effects of payment delay on contractors’ cash flow in the case of the Tanzania Rural and Urban Roads Agency. The study had three research objectives, which were formulated to answer the general problem of the research study, which was elaborated in the statement of the problem. This study used a case study design. The study population consisted of Contractors in TARURA road projects. The researcher used a purposive sampling technique to draw a sample size of 109 respondents from the population. The findings show that factors such as appropriate allocation of funds and limited funds provided by the client significantly influenced the contractor’s cash flows and, hence, inadequate cash flow. More so delaying payments affects the contractors in meeting project costs in terms of wages, materials, equipment, and logistics. This study explores the impact of financial delays on contractors’ cash flow in road projects undertaken by TARURA in the Dar es Salaam region. It specifically examines how delayed fund releases from financiers; postponements in work certification, and non-compliance with contract terms affect contractors' financial stability. Adopting a quantitative approach, the research integrates both quantitative and qualitative data collection to evaluate the extent of these factors' influence. The findings shed light on the challenges contractors encounter due to delayed payments, underscoring the necessity for improved contract management and prompt financial disbursements. The results of this study will serve as a valuable resource for guiding policy recommendations aimed at enhancing cash flow predictability and overall efficiency in road project execution. Keywords: Contractor’s Cash Flow, Delayed Release of Funds, Works Certification Delays, Contractual Compliance, and Road Project Financial Management.

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