New Govt Construction Package Makes Contractors Liable for Project Defects

The federal government has unveiled a new construction package that will hold contractors and consultants more accountable for defects in public development projects. Currently, the standard Defect Liability Period (DLP) stands at one year, but plans are underway to extend it to three years, with aspirations of extending it further to five years.

This extended liability period aims to elevate construction standards and ensure greater responsibility for defects over a more extended period. Federal Minister for Economic Affairs Ahad Khan Cheema revealed that this will compel contractors and executing agencies to uphold stringent construction standards while bearing the burden of defects for a more extended duration.

Additionally, consultants will now fall under the purview of a new regulatory framework established by the Construction Industry Development Board (CIDB), rendering them legally and financially responsible for design flaws and errors. Although contractors have faced penalties for subpar work, no legal mechanism existed to hold consultants accountable.

The proposal to hold consultants liable has garnered support from the Consulting Association of Pakistan (CAP). Furthermore, the minister instructed Minister of State for Finance Bilal Azhar Kayani to initiate formal consultations with the State Bank of Pakistan (SBP) and the Pakistan Banks Association (PBA) regarding the financial challenges confronting construction firms.

These discussions will also explore the viability of setting up a dedicated Construction Development Bank (CDB).