ISLAMABAD: Pakistan is considering establishing one or two new institutions to regulate and promote its construction industry as part of a broader reform push, Federal Minister for Economic Affairs Ahad Cheema said, according to a government statement.
The proposals were discussed at a meeting chaired by Cheema on reforms in the construction sector, where Housing Secretary Capt. (retd.) Muhammad Mahmood delivered a detailed briefing. Minister of State Bilal Azhar Kayani, the managing director of the Public Procurement Regulatory Authority (PEPRA), Planning Commission officials and construction industry representatives attended.
Under the plan, one body would take on a regulatory role while a second would work to promote the sector, Cheema said. He directed officials to complete consultations with the Constructors Association of Pakistan on setting up the new institution soon.
The government is also weighing changes to how contractors' guarantee funds are handled during the defect liability period, with a proposal to place the money in profit-bearing accounts and return the principal plus profit to contractors after the stipulated period.
Officials proposed applying the Dispute Avoidance/Adjudication Board (DAB) procedure to projects costing 20 billion rupees ($71 million) or more, and Cheema said the formula should also cover smaller projects. Further consultation will determine how project costs are calculated for the DAB process.
The future regulatory framework is drawing on standards set by the International Federation of Consulting Engineers (FIDIC), Cheema said. PEPRA will begin work on setting the defect liability period for major projects at three years or more, a move Cheema said would encourage contractors to deliver quality work. The three-year period would be extended in phases to smaller projects.
"We are making every possible effort to strengthen the construction sector and improve project implementation," Cheema said.
