From Dawn · Khaleeq Kiani · · 2m
Govt Considers Construction Authority
Pakistan's government plans new regulatory body for construction industry with defect liability period.
In brief
Pakistan's government plans new regulatory body for construction industry with defect liability period. Pakistan's government is considering creating a regulatory authority and marketing entity for construction industry with a three-year defect liability period for major projects. Originally reported by Dawn.
Government Meeting on Construction Reform
Economic Affairs Minister Ahad Cheema chairs meeting in Islamabad on October 28, 2026 to discuss construction industry reforms.
“Email Story”
Proposed Construction Authority Structure
Government considering two new bodies: regulatory authority and marketing entity for construction industry.
Defect Liability Period Debate
Construction industry wants minimum Rs20 billion threshold for defect liability period; government pushes for lower amounts.
Exploratory Meeting Details
Meeting attended by Economic Affairs Minister Ahad Cheema, Finance Minister Bilal Azhar Kayani, Housing Secretary Muhammad Mahmood and other officials.
Construction Industry Development Authority Bill
Meeting discussed proposed Construction Industry Development Authority (CIDA) Bill with options for single or dual entities.
Stakeholder Consultation Plan
Government to continue consultations with stakeholders including CAP and relevant agencies to fine-tune institutional structure.
Defect Liability Funds Management
Proposed to place retention money in accounts earning returns with principal and interest paid back after period.
DAAB Mechanism for Projects
Proposed to apply Dispute Avoidance and Adjudication Board (DAAB) mechanism to government projects with Rs20bn threshold.
Threshold Reduction Request
Cheema called for lowering the Rs20bn threshold for DAAB mechanism application and further consultation.
International Standards Adoption
Government plans to use International Federation of Consulting Engineers (FIDIC) rules as key reference for construction standards.
Defect Liability Period Implementation
PPRA to begin work on three-year defect liability period for major projects with phased extension to smaller projects.
Previous Construction Package
Government previously contemplated comprehensive package to invigorate construction industry with regulatory simplification and investment attraction.
Proposed Package Measures
Package included Construction Industry Development Board, Construction Development Bank, import/export policy rationalization and targeted tax reforms.
Correction Note
Previous version stated government was considering two regulatory authorities; corrected to one regulatory authority and one marketing entity.
The takeaway
Pakistan's government is considering creating a regulatory authority and marketing entity for construction industry with a three-year defect liability period for major projects.
