Construction sector: Govt to set up CIDB to oversee standards and regulation

The government is set to establish the Construction Industry Development Board (CIDB) to regulate standards, ensure quality and provide strategic oversight for Pakistan’s construction sector, as it considers a comprehensive development package to overhaul the vital sector.

The development came to light during a high-level meeting chaired by Federal Minister for Economic Affairs and Establishment Division Senator Ahad Cheema, held to oversee major regulatory, operational, and financial reforms within the national construction sector.

According to a statement released on Saturday, the meeting was attended by Minister of State for Finance Bilal Azhar Kayani, Federal Secretary for Housing and Works Captain (R) Mahmood, Managing Director Public Procurement Regulatory Authority (PPRA), leadership and representatives of the Construction Association of Pakistan (CAP), and senior relevant officials.

As part of a broader vision to revamp the industry, the government is considering a comprehensive construction industry development package that includes the establishment of a CIDB, the evaluation of a dedicated Construction Development Bank (CDB), rationalisation of import and export policies, and targeted tax reforms for the construction sector, read the statement.

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During the deliberations, Cheema emphasised that the proposed CIDB will play a dual role encompassing both the overall development of the construction sector and a regulatory function to oversee industry standards, contractors, and consultants. Composed of representatives from both the public and private sectors, the board will serve as a unified platform to elevate national standards.

The minister noted that complete alignment exists between the federal government and CAP on the imperative need for this body, adding that the federal government will formally submit the framework to the prime minister for final approval.

Furthermore, the broader development package under consideration aims to address financial and policy bottlenecks through tailored tax incentives and aligned import and export policies that encourage modern technology adoption and build local construction capacity.

Focusing on the long-term durability and structural integrity of public infrastructure, the federal minister announced that the government will soon extend the standard Defect Liability Period (DLP) for public development projects from the current one year to three years, with a clear roadmap to further expand it to five years in the future.

He observed that civil infrastructure must not deteriorate shortly after completion, asserting that extending the liability period will compel contractors and executing agencies to uphold high quality standards and prevent premature decay.

Addressing critical gaps in accountability, Cheema pointed out that while penalties currently exist for contractors in cases of default or poor performance, no legal framework or penalty mechanism exists for consultants.

Under the new regulatory framework of the CIDB, consultants will also be brought under direct oversight, ensuring they are held legally and financially accountable for design flaws or technical errors. Representatives of CAP fully endorsed this stance, agreeing that establishing regulatory accountability for consultants is essential to ensure design precision and protect public investments.

In response to proposals put forward by CAP representatives regarding banking hurdles in securing financial and performance guarantees, as well as their request for a specialised Construction Development Bank (CDB), Cheema directed Minister of State for Finance Bilal Azhar Kayani to initiate formal, detailed discussions with the State Bank of Pakistan (SBP) and the Pakistan Banks Association (PBA).

Any decision regarding the establishment of a dedicated CDB will be evaluated based on the detailed feedback and financial feasibility provided by the SBP and PBA.

Cheema affirmed that an independent board playing both development and regulatory roles will enforce accountability, streamline dispute resolution, and raise national construction standards to international levels.