- CIDA bill requires cabinet and parliamentary approval.
- Govt plans to adopt FIDIC standards for construction projects.
- Govt plans phased extension of liability period to smaller projects.
The government is considering either establishing a Construction Industry Development Authority (CIDA) or setting up two separate bodies — one to develop the construction sector and the other to regulate it.
It requires approval of the federal cabinet and then parliament. A bill is going to be drafted and tabled before the National Assembly and the Senate of Pakistan to put in place the construction package with the assent of parliament, The News reported on Thursday.
Federal Minister for Economic Affairs and Establishment Division Senator Ahad Cheema chaired a meeting to discuss reforms aimed at strengthening Pakistan’s construction sector, improving project delivery and addressing key issues faced by the industry.
According to an official announcement made after the meeting, it discussed the proposed Construction Industry Development Authority (CIDA) Bill.
The Minister for Economic Affairs, Ahad Cheema, emphasised that the bill required detailed consideration, including whether to establish a single body for the construction sector or two separate entities: one to regulate the sector and another to promote the construction industry and handle related matters.
He asked the relevant officials, Minister of State for Finance Bilal Azhar Kayani and representatives of the Constructors Association of Pakistan (CAP), to consult further on the proposed institutional structure.
The retention money deposited by contractors during the defect liability period was also discussed. The meeting considered a proposal to place these funds in accounts that earn a return, with the principal amount and interest paid back to contractors after the stipulated period. The minister for economic affairs called for further consultation to develop a workable mechanism.
The meeting considered applying the existing Dispute Avoidance/Adjudication Board (DAAB) mechanism to government projects. The Board would monitor project implementation and help prevent or resolve disputes as they arise.
CAP proposed applying the mechanism to projects valued at Rs20 billion and above. Minister Cheema called for the proposed threshold to be lowered and further consultation among relevant stakeholders to determine an appropriate limit.
The forthcoming framework for the construction sector will also draw on the rules and standards of the International Federation of Consulting Engineers (FIDIC). The minister, Ahad Cheema, underscored the importance of using these international standards as a key reference.
The minister for economic affairs directed the Pakistan Public Procurement Regulatory Authority (PPRA) to begin work on introducing a defect liability period of at least three years for major projects, with the measure to be extended to smaller projects in phases.
