ISLAMABAD, Pakistan: Pakistan may create one or two new institutions to oversee and boost its construction sector, Federal Minister for Economic Affairs Ahad Cheema said, as the government weighs a package of reforms aimed at improving project delivery and curbing disputes.
Cheema, who chaired a high-level meeting on the proposed changes, said one entity could serve as a regulator while a separate body focuses on promoting the industry. He instructed officials to wrap up consultations with the Constructors Association of Pakistan on the new institution without delay.
The Housing Secretary, Capt. (retd.) Muhammad Mahmood, presented a detailed briefing at the meeting, which was also attended by Minister of State Bilal Azhar Kayani, the managing director of the Public Procurement Regulatory Authority (PEPRA), Planning Commission representatives and construction industry officials.
Among the ideas under review is a plan to hold contractors’ guarantee funds in profit-bearing accounts during the defect liability period, then return the principal along with the profit once the stipulated period ends. Another proposal would extend the Dispute Avoidance/Adjudication Board (DAB) process to projects worth 20 billion rupees ($71 million) or more — a threshold Cheema said should be lowered so smaller projects are covered too. Officials will hold further consultations on how project costs are calculated for the DAB mechanism.
Cheema said the sector’s future framework is being guided by the standards of the International Federation of Consulting Engineers (FIDIC). PEPRA will start work on setting a defect liability period of at least three years for major projects, which Cheema said would push contractors toward higher-quality work, with the requirement to be phased in for smaller projects.
“We are making every possible effort to strengthen the construction sector and improve project implementation,” Cheema said.
