ISLAMABAD: The government is contemplating a comprehensive package to invigorate the construction industry, aiming to simplify regulations, attract investment, and bolster institutional support.

This package envisages a series of measures, including the establishment of a Construction Industry Development Board (CIDB), the evaluation of a dedicated Construction Development Bank (CDB), the rationalisation of import and export policies, and targeted tax reforms for the construction sector.

A meeting, chaired by Minister for Economic Affairs Ahad Cheema, was held on Saturday to oversee major regulatory, operational, and financial reforms in the construction sector. State Minister for Finance Bilal Azhar Kayani, and senior officers participated.

An official announcement said the proposed CIDB will play a dual role, encompassing both the overall development of the construction sector and a regulatory function overseeing 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.

Plans new board, bank and tax cuts

Mr Cheema noted that there is complete alignment between the federal government and the Construction Association of Pakistan (CAP) on the imperative need for this board, adding that the government will formally submit the framework to the prime minister for final approval.

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

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

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, Mr 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 CIDB regulatory framework, 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, the minister directed State Minister for Finance Mr Bilal 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.

Published in Dawn, August 16th, 2026