Adaptation Of Istisna’a And Ijara'h Into The Conceptualization Of Ips In The Malaysia Construction Industry

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Date
2016-03
Authors
Abdelsalam, Saieed Mohamed A.
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Publisher
Universiti Sains Malaysia
Abstract
The increasing project demands have driven Malaysian construction industry to embrace various modern types of procurement system such as Design and Build and Project Management Consultancy. However, lack of transparency, low quality of workmanship, risk, dispute, lack of capability and management-related problems are some of the setbacks identified to be associated with the current procurement system used in the Malaysian construction industry. This research was therefore conducted to provide an alternative Islamic procurement system that would address the identified problems. Hence, this research is implemented to achieve the following objectives: first, this research will evaluate the usage of procurement systems practised in Malaysian construction industry; second, to identify the major problems in procurement systems practised in Malaysian construction industry were identified ; third, the review on the applicability of Istisna’a and Ijara’h in construction procurement system were conducted; fourth, the need for an Islamic procurement system in Malaysian construction industry were determined; and fifth, the Islamic procurement system in Malaysian construction industry were conceptualised. By using a mixed method approach, 800 structured questionnaires were distributed to industry players of Malaysian construction industry in Peninsular Malaysia with 151 completed and valid questionnaires were returned. In addition, 10 interviews were conducted to complement the quantitative data. The findings of this research suggest that the most used procurement system in Malaysian construction industry is the traditional procurement system. This study also found that the major problems associated with current procurement system are: dispute, cost overrun, as well as management and capability related problems. This study proposed Islamic procurement system with an adaptation of Istisna’a and Ijara’h in the Malaysia construction industry.
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Keywords
Malaysian construction industry
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