# Construction Industry Development Authority bill: govt weighs two regulators and a 3-year defect liability for big projects

Source: Searchable (https://searchable.pk/news/property/construction-industry-development-authority-bill-govt-weighs-two-regulators-and)
Type: News article
Author: Searchable Editorial
Published: 28 Oct 2026
Updated: 28 Oct 2026
Retrieved: 28 Oct 2026

> Ahad Cheema's meeting also discussed putting contractors' retention money in interest-bearing accounts and using FIDIC rules. Builders want the new rules to start at Rs 20 billion projects; the government wants a lower bar.

**The federal government is considering setting up as many as two authorities to regulate and promote the construction industry, and a defect liability period of at least three years for major projects**, [Dawn reported](https://www.dawn.com/news/2040454/govt-considering-creation-of-2-regulatory-authorities-for-construction-industry-3-year-liability-period-for-projects) on Wednesday 28 October. The plans were discussed at a meeting on the proposed **Construction Industry Development Authority (CIDA) Bill** chaired by Economic Affairs Minister **Ahad Cheema** in Islamabad.

## What is on the table

- **One body or two.** Officials are weighing a single authority or two: a regulator, and a separate body to promote the industry and handle related matters.
- **Defect liability of at least three years.** The Pakistan Public Procurement Regulatory Authority (**PPRA**) was told to start work on a defect liability period of at least three years for major projects, with smaller projects brought in in phases.
- **Retention money that earns interest.** The money withheld from contractors during the liability period would sit in interest-bearing accounts and be paid back with the interest at the end. Cheema asked for more consultation to make that workable.
- **Dispute boards.** A Dispute Avoidance and Adjudication Board (DAAB) would be used on government projects to head off and settle disputes.
- **International rules.** The framework will draw on the standard contracts of FIDIC, the International Federation of Consulting Engineers, which Cheema called a key reference.

Minister of State for Finance **Bilal Azhar Kayani** and Housing Secretary retired Captain **Muhammad Mahmood** attended. The meeting was exploratory, and consultation with the **Constructors Association of Pakistan (CAP)** and other stakeholders will continue.

## The sticking point: how big is "major"?

CAP wants the defect liability and dispute board rules to apply only to projects of **Rs 20 billion and above**. The government wants a lower threshold, still to be fixed after consultation. The lower the bar, the more road, building and water projects would carry a three-year guarantee.

## Why it matters to you

A defect liability period means that if a newly built public road cracks, a hospital wing leaks or a drain fails within the period, the contractor must repair it at its own cost, rather than the taxpayer paying again. This week's **Multan plaza roof collapse**, which killed one person (our [Multan building collapse report](/news/pakistan/multan-building-collapse-roof-of-under-construction-plaza-on-northern-bypass)), involved a private building that the public-project liability plan would not cover, but the debate is about the same question: who answers for poor construction.

The plan builds on an August package that proposed a Construction Industry Development Board, a possible Construction Development Bank, and tax and trade changes for the sector.

## If you are building or buying

For a private home, ask your builder in writing what defects they will fix and for how long, and keep part of the payment until that period ends. Our [stamp duty calculator](/tools/property/stamp-duty-calculator) and [property tax calculator](/tools/property/property-tax-calculator) show the government charges on a purchase.

## Frequently asked questions

**What is a defect liability period?**

The time after a project is handed over during which the contractor must fix defects at its own cost. The government is considering at least three years for major public projects, Dawn reported on 28 October 2026.

**What is the CIDA bill?**

The proposed Construction Industry Development Authority Bill, under which the government may create one regulator for the construction industry or two bodies, one to regulate and one to promote the industry.

## Sources

- Govt considering creation of 2 regulatory authorities for construction industry, 3-year liability period for projects (Dawn): https://www.dawn.com/news/2040454/govt-considering-creation-of-2-regulatory-authorities-for-construction-industry-3-year-liability-period-for-projects

How to cite: "Construction Industry Development Authority bill: govt weighs two regulators and a 3-year defect liability for big projects", Searchable, 28 Oct 2026, https://searchable.pk/news/property/construction-industry-development-authority-bill-govt-weighs-two-regulators-and