Proposals Under Consideration to Establish Construction Development Board and Dedicated Bank for Sector’s Growth
ISLAMABAD: The government has begun deliberations on plans to form a Construction Industry Development Board (CIDB) and a standalone construction development bank to help drive changes and development in the construction industry.
Reforms in the national construction sector were discussed at a high level meeting chaired by Federal Minister for Economic Affairs Ahad Cheema. This session was attended by Minister of State for Finance, Secretary Housing, Managing Director PPRA, Members of Construction Association of Pakistan (CAP) and officials from different institutions.
A detailed development package for construction sector was discussed in the meeting and measures were taken to rationalize import-export policies and undertake tax reforms.
The Proposed Board’s Objectives include the following:
The proposed Construction Industry Development Board (CIDB) will serve as a champion board for growth as well as a regulatory body, Ahad Cheema said. The board will be made up of public and private sector representatives, and will have one main purpose: aligning the standards of construction to international standards.
The federal minister says there is complete agreement among the government and the Construction Association of Pakistan on the formation of the CIDB and its working mechanism is soon to be presented before the Prime Minister for gazetting.
The proposed development package will remove the obstacles of financial and policy constraints on the construction industry and encourage the use of the latest technology, he said. Moreover, the defect liability period for public projects is to be soon extended from one year to three years with a well-charted course of action to raise it to five years in the future.
Consultants and Contractors will be held accountable.
Cheema said there was a need to ensure quality assurance as the infrastructure should not be substandard on completion of work and the contractors should have high standards. He added that consultants are not currently subject to any effective laws to penalize them, but under the CIDB, consultants too will fall under the direct supervision and control laws.
Design failures and imperfections will make consultants legally and financially liable. The Construction Association of Pakistan also has fully backed the regulatory accountability of consultants.
Financial structures, said Ahad Cheema, a decision will be taken after the review of financial feasibility by State Bank of Pakistan and Pakistan Banking Association, regarding the formation of a special purpose bank, called Construction Development Bank. The government’s main concern is that all public projects are “value for money” and “fit for purpose”, meaning that public money is the property of the nation and cannot be squandered by mediocre performance or poor design.
He said the government is making “strategic moves” to improve the quality of public projects, their monitoring, transparency, and sustainability, as it implements sectoral reforms.