The government is preparing to extend the standard Defect Liability Period for public development projects from the existing one year to three years, as part of a broader effort to improve the durability, quality and cost effectiveness of infrastructure developed through public investment. The proposed change is expected to introduce greater accountability for defects that emerge after the completion of construction projects, while the government is also considering a longer term roadmap that could eventually increase the liability period to five years.
The proposed reform was discussed during a meeting chaired by Minister for Economic Affairs and Establishment Division Senator Ahad Khan Cheema in Islamabad. The meeting reviewed a range of regulatory, operational and financial measures aimed at strengthening the construction sector and improving the performance of development projects. According to a press release issued following the meeting, the government is looking at reforms that could address longstanding concerns surrounding the quality, maintenance and durability of public infrastructure.
Under the existing framework, public development projects generally carry a Defect Liability Period of one year. The proposed extension to three years would give government departments and relevant authorities a longer period in which contractors remain responsible for addressing construction related defects that become apparent after a project has been completed. The government has also outlined a clear roadmap for eventually extending the period to five years, indicating a broader policy direction toward longer term responsibility for the quality of public works.
Senator Ahad Khan Cheema stressed that public infrastructure should not begin to deteriorate shortly after completion. During the meeting, he reiterated the government’s commitment to ensuring that civil infrastructure remains durable and provides value over a longer period. The proposed changes are therefore aimed at reducing the risk of premature deterioration and ensuring that public funds spent on infrastructure projects generate lasting benefits.
The focus on a longer Defect Liability Period comes as part of wider regulatory and operational reforms being considered for the construction industry. The government is examining measures that could improve construction standards while strengthening the institutional framework supporting the sector. By extending the period during which contractors remain responsible for defects, authorities intend to place greater emphasis on construction quality and project performance beyond the formal completion of a development scheme.
The meeting was also informed that the government is considering a comprehensive construction industry development package. One of the proposals under review is the establishment of a Construction Industry Development Board. The proposed body could form part of efforts to strengthen the institutional structure of the construction sector and support measures aimed at improving industry standards, although further details regarding its proposed mandate and structure were not disclosed.
Another proposal being evaluated is the establishment of a dedicated Construction Development Bank. The government is examining the possibility of creating such an institution as part of the broader construction industry development package. The proposed bank could form part of efforts to support the financial requirements of the construction sector, although the meeting did not provide details regarding its potential capital structure, financing model or operational framework.
In addition to infrastructure quality and institutional development, the government is also reviewing policies affecting the broader construction industry. Rationalisation of import and export policies has been identified as one of the areas under consideration. Changes in these policies could have implications for businesses involved in construction materials, equipment and related activities, although the government has not yet announced specific adjustments.
Targeted tax reforms for the construction sector are also being examined. The proposed measures form part of the wider package being considered by the government to support the development of the industry. No specific tax rates, exemptions or incentives were announced in the meeting, and further details are expected to emerge as the proposed reforms are evaluated.
The proposed extension of the Defect Liability Period, along with the potential establishment of a Construction Industry Development Board and Construction Development Bank, reflects the government’s broader review of the construction sector. The measures are being considered with an emphasis on improving the quality and durability of public infrastructure while also examining regulatory, financial, trade and tax policies affecting construction activity.
The government has yet to announce a final implementation timeline for the three year Defect Liability Period or provide details on when the proposed five year period could be introduced. Further decisions are expected as the authorities continue reviewing the proposed construction industry development package and related reforms.
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