Government prepares construction sector reforms, may set up one or two bodies
Federal Minister for Economic Affairs Ahad Cheema chaired a meeting on reforms to Pakistan's construction sector. He said one body or two separate bodies could be created to regulate and promote the industry.
- Ahad Cheema chaired a meeting on construction sector reforms in Islamabad on October 28.
- One body or two separate bodies, one regulatory and one for promotion, may be created.
- PPRA is to start work on a defect liability period of 3 years or more for large projects.
Federal Minister for Economic Affairs and Establishment Division Senator Ahad Cheema chaired a meeting in Islamabad on October 28 to discuss reforms aimed at strengthening the construction sector, improving project delivery and addressing problems faced by the industry, according to the Associated Press of Pakistan and Express News.
The meeting discussed the proposed Construction Industry Development Authority (CIDA) Bill, APP reported. The minister said the bill needed detailed consideration, including whether to set up a single body for the sector or more than one. Express News quoted him as saying that one body or two separate bodies could be formed, with one acting as a regulator and the other working to promote the industry.
He said consultation with the Constructors Association of Pakistan (CAP) on establishing the new body would be completed soon. The Secretary Housing gave a detailed briefing on the proposed reforms, and the minister directed further consultation on various aspects of them.
The briefing also covered contractors' guarantee money. A proposal under consideration would keep contractors' guarantee amounts in profit-bearing accounts during the defect liability period. After that period ends, the original amount would be returned to contractors together with the profit. The proposal is meant to set out a procedure for financial matters linked to construction projects.
Participants also stressed strict adherence to the Dispute Avoidance/Adjudication Board (DAB) procedure for monitoring projects and preventing disputes. CAP officials proposed applying it to projects costing Rs20 billion or more. Mr Cheema directed that the same formula be applied to projects costing less than Rs20 billion as well. He said further consultation would be held on how project costs are determined under the DAB procedure.
He said the future framework for the sector is being prepared with guidance from the rules and standards of the International Federation of Consulting Engineers (FIDIC). He added that the Public Procurement Regulatory Authority (PPRA) will start work on setting the defect liability period for large projects at 3 years or more. In his view, a longer period would push contractors to deliver quality work, and the three-year period would be extended in stages to smaller projects.
Minister of State Bilal Azhar Kayani, Secretary Housing Captain (retd) Muhammad Mahmood, the managing director of PPRA, and officials of the Planning Commission and CAP attended the meeting.
Why it matters
The construction industry employs many people in Pakistan, and changes to contractor rules, oversight and project quality standards could affect those working in the sector and the delivery of public projects.
