Islamabad: The federal government is considering a comprehensive package of regulatory, operational and financial reforms to strengthen Pakistan’s construction sector, including the proposed establishment of a Construction Industry Development Board (CIDB), a dedicated development bank and targeted tax measures.
Federal Minister for Economic Affairs and Establishment Division Senator Ahad Khan Cheema chaired a meeting on Saturday to review the proposed reforms. The meeting was attended by Minister of State for Finance Bilal Azhar Kayani, Federal Secretary for Housing and Works Captain Mahmood (retd), Public Procurement Regulatory Authority (PPRA) Managing Director, representatives of the Construction Association of Pakistan (CAP) and senior officials.
Under the proposed reform package, the government is considering establishing the CIDB as a body responsible for both developing and regulating the construction industry. The proposed board would oversee industry standards, contractors and consultants, with representation from the public and private sectors.
Cheema said there was broad agreement between the federal government and CAP on the need for such a body. He added that the government would submit the proposed framework to the prime minister for approval.
The reform package also includes a review of import and export policies and targeted tax reforms aimed at addressing policy and financial constraints, encouraging the adoption of modern construction technologies and strengthening local capacity.
The government is also evaluating the feasibility of establishing a dedicated Construction Development Bank (CDB). The proposal was raised by CAP representatives in the context of difficulties faced by contractors in obtaining financial and performance guarantees.
Cheema directed the Minister of State for Finance to initiate consultations with the State Bank of Pakistan (SBP) and the Pakistan Banks Association (PBA) on the proposal. A decision on establishing the bank would be based on feedback from the two institutions and an assessment of its financial feasibility.
The meeting also discussed measures to improve the quality and durability of public infrastructure. Cheema announced that the government would soon extend the standard Defect Liability Period (DLP) for public development projects from one year to three years, with a longer-term objective of increasing it to five years.
He said the extended liability period would strengthen accountability among contractors and executing agencies and help prevent premature deterioration of civil infrastructure.
The proposed regulatory framework would also introduce greater accountability for consultants. While penalties are currently available against contractors for default or poor performance, Cheema noted that there was no comparable legal framework for consultants.
Under the proposed CIDB framework, consultants would come under direct regulatory oversight and could be held legally and financially accountable for design flaws and technical errors. CAP representatives supported the proposal, saying greater accountability for consultants was necessary to improve design quality and protect public investment.
Cheema said the government’s primary objective was to ensure that public infrastructure projects delivered value for money while meeting required standards of quality and durability.
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