The federal government is considering a comprehensive reform package to strengthen Pakistan’s construction sector, with proposed measures covering regulation, taxation, financing, industry standards, and accountability.
The proposals were reviewed at a meeting chaired by Federal Minister for Economic Affairs and Establishment Division Senator Ahad Khan Cheema. Officials from relevant government departments, representatives of the Construction Association of Pakistan (CAP), and other stakeholders participated in the discussion.
Proposed Construction Industry Development Board
One of the key proposals is the establishment of a Construction Industry Development Board (CIDB) to regulate and support the sector.
The proposed body could oversee construction standards, contractors, consultants, and other industry stakeholders, with representation from both the public and private sectors.
The government and CAP have broadly agreed on the need for a dedicated regulatory framework. The proposed CIDB structure is expected to be presented to the Prime Minister for approval.
Tax and Trade Reforms Under Consideration
The reform package also includes a review of import and export policies and targeted tax measures aimed at addressing financial and policy challenges faced by the construction industry.
Officials are considering measures that could encourage the adoption of modern construction technologies while strengthening local industry capacity.
Proposal for Construction Development Bank
The government is also examining a proposal to establish a Construction Development Bank (CDB).
CAP representatives highlighted difficulties faced by contractors in obtaining financing and financial or performance guarantees. In response, the government has directed consultations with the State Bank of Pakistan (SBP) and the Pakistan Banks Association to assess the financial feasibility of the proposed institution.
Longer Defect Liability Period Proposed
Improving the quality and durability of public infrastructure was another major focus of the discussions.
The government is considering extending the standard Defect Liability Period (DLP) for public development projects from the current one year to three years, with a longer-term target of five years.
The proposed change could place greater responsibility on contractors for construction quality and help reduce premature deterioration of public infrastructure.
Greater Accountability for Consultants
Under the proposed CIDB framework, consultants could also face legal and financial responsibility for design defects and technical errors.
The government says the broader objective of the reforms is to improve construction quality, strengthen accountability, modernize the sector, and ensure better value for public spending.
If approved, the proposed measures could represent a significant shift toward a more structured and accountable regulatory framework for Pakistan’s construction industry.
