CAP News

 

CAP News Media Coverage in Different News Papers  October 2016 To September 2017

     CAP News Media Coverage in Different News Papers

---------------------------------------------------------------------------------------------------------------------------------------------------------

CAP LCCI INK MOU FOR SETTLEMENT OF DISPUTE

Constructors Association of Pakistan (CAP) and the Lahore Chamber of Commerce & Industry (LCCI) have signed a Memorandum of Understanding (MoU) by virtue of which the Association has declared LCCI as permanent venue for settlement of commercial, corporate and other disputes of its members and other groups through Arbitration and Mediation.

Constructors Association, as a result of this MoU, will refer disputes of its members and other relevant groups to LCCI for amicable settlement through mediation in accordance with LCCI Mediation Centre rules and regulations.

CAP Chairman Engr. Sikandar Hayat Khattak and LCCI President Abdul Basit inked the document on behalf of their organizations at a ceremony held the other day.  Chief Justice Lahore High Court Mr. Justice Syed Mansoor Ali Shah was also present on this occasion.

LCCI is providing and promoting the use of Alternate Dispute Resolution (ADR) mechanisms for resolution of disputes, including mediation by litigants and disputants so that disputes are resolved out of court and burden of caseload on judiciary is reduced thereby reducing time and cost of dispute resolution for litigants and disputants and increasing the efficiency of courts.

Both the parties will also establish effective consultation, co-operation and the exchange of information on mediation and CAP will encourage its members to use LCCI mediation centre for settlement of disputes. The LCCI will appoint permanent member of staff to serve as focal point for execution of the MoU while CAP will hold awareness events in form of seminars, workshops, presentations for its members and other stakeholders and invite LCCI to lead such events.

Speaking on this occasion, CAP Chairman Sikandar Hayat Khattak appreciated the efforts of the LCCI for setting up mediation centre to resolve the issues being faced by its members or other sections of trade and industry out of the court and on emergent basis. He said that they would be encouraging their members to take full advantage of this service of the alternate dispute resolution mechanism.

---------------------------------------------------------------------------------------------------------------------------------------------------------

ENGR. KAMAL NASIR KHAN ELECTED CAP CHAIRMAN

LAHORE: Engr. Kamal Nasir Khan has been elected as Chairman of the Constructors Association of Pakistan (CAP) while Sardar Muhammad Ishaq Khan as Senior Vice Chairman for the year 2017-18.

Members of the Association also elected Sabir Hussain Javed as Vice Chairman (Punjab), Naeemuddin A. Siddiquie Vice Chairman (Sindh), Engr. Ashfaq Hussain Vice Chairman (KPK) and Malik Muhammad Kaleem Ullah as Vice Chairman (Islamabad).

Other who were elected as members of the executive committee are Engr. M. S. Asad Mukhtar, Engr. Ahmad Ghazal Usmani, Choudhary Muhammad Habib Kanwal, Engr. Arshad Dad, Azhar ul Hassan, Faisal Mahmood from corporate class. While Muhammad Asaduallah Khan, Haji Zahir Khan, Muhammad Shafiq and Choudhary Naeem Akhtar were elected as executive committee members in associate class.

Results of the elections were announced at the Annual General Meeting of the Constructors Association of Pakistan held the other day.

Speaking on this occasion, the outgoing Chairman Engr. Sikandar Hayat Khattak welcomed the new team and hoped that it would work with full force to resolve the issues being faced by the contractors community and construction industry.

CAPs newly elected Chairman Engr. Kamal Nasir Khan while addressing his fellows said that he would take all the members along with him to work jointly for resolving the issues construction industry was facing. He said that they would raise the issue of giving Pakistani construction companies their rightful share in CPEC related projects. He said CPEC is a game changer for Pakistan but it can also prove a turning point for local construction industry if it is given ten percent share in it as per the rules and regulations.

He said that he will raise this issue at all the highest forums and also try to settle the issues with Pakistan Engineering Council. He said issue of double taxation on construction industry would also be raised so as to bring down the cost. He said taxes on construction industry were not only increasing but they have to pay taxes at federal and provincial level.

Engr. Kamal Nasir Khan also vowed to increase the membership of the Association and also assured the members to leave no stone unturned to come up to their expectations.

 

CAP SLAMS NON-PAYMENT OF DUES

LAHORE: Constructors Association of Pakistan (CAP) has expressed its serious concerns over delay in release of funds to the contractors of different ongoing development projects in the province.

In a statement issued here Friday, CAP Vice Chairman (Punjab) Imran Abbas Awan said that contractors were facing financial hardships because of non-payment. He termed it as an economic exploitation of the contractors. He said liquidity crunch being faced by the contractors were also hampering the speed of different development projects.

He hinted the delay in completion of these projects if financial problems of the contractors were not resolved immediately.

 

 PFD FLAYED OVER DISHONOURING OF CHEQUES

LAHORE - Constructors Association of Pakistan (CAP) Vice Chairman (Punjab) Imran Abbas Awan has expressed concern over continuous dishonouring of cheques issued by the Punjab Finance Department (PFD) to contractors of different projects.

In a statement issued here on Friday, Imran claimed that payment of billions of rupees of the contractors had stuck because of this situation and they were facing serious liquidity crunch. He said that the public sectors development projects would also hamper if the situation persists. If our financial hardships are not settled at the earliest the development projects may not be completed within the stipulated time, he added.

CAP Vice Chairman urged the Chief Minister Punjab Shahbaz Sharif to direct the finance department to immediately clear the payments of the construction contractors.

 

CAP CHIEF ASKS FOR MORE SHARES IN CPEC PROJECTS

LAHORE: Chairman of Constructor Association of Pakistan (CAP), Engr. Sikandar Hayat Khattak has called for giving more shares to local construction firms in projects being launched under the China-Pakistan Economic Corridor (CPEC).

Main beneficiaries of the ongoing construction activities under the CPEC are Chinese firms which are subletting the earth work to the local construction. This work is far low than the capacity of CAP member companies, Sikandar Hayat Khattak said while talking to Business Recorder here on Tuesday. CAP Vice Chairman (Punjab) Imran Abbas Awan was also present on this occasion.

Replying to a query about past working experience of Pakistani firms in mega projects, he told that the local constructors completed the work of Islamabad-Peshawar motorway when the foreign firms left it in the mid. He said that the CAP members also had worked on M-2 project as well. Similarly, in Murree Road Project, local constructor has supplied pre-mix to the project due to its expertise in the sector. This shows the ability of local constructors to compete with the international constructors, he believed.

He said that the Association contacted the government to get share in the CPEC related work and after hectic efforts succeeded in securing only four projects. Nevertheless, the conditions of these projects are very hard to meet by any local construction firm. Khattak was worried and added that the Chinese firms on other hand were getting huge incentives such as exemptions in taxes and duties. Pakistani firms should be given a level playing field at par with their Chinese competitors, he observed.

Similarly, condition of making a Joint Venture (JV) with local partner in mega projects is revoked by the government for the Chinese in CPEC projects which is mandatory for foreign firms while working in Pakistan. Foreign firms have to make at least 70-30 percent JV in order to develop the local sector, transfer of latest technology and human resource development, Khattak observed.

In reply to another question, Khattak said the government should focus on revival of the Pakistan Steel Mills (PSM) the CPEC projects need huge volume of steel products and PSM should be encouraged to play its role in it instead of importing these products.

He said that the government should bring down duties on import of machinery by the local constructors. These duties were brought down during Musharraf regime but Zardari government again pushed these up to 35 percent from only 5 percent.

He also appealed to the ministry of commerce and Federal Board of Revenue (FBR) to increase the age of import of used construction sector machinery to 15-year instead of 10-year age. 100-Ocatne fuel is used in the modern latest machinery which is not available in Pakistan while the fuel available was causing damage to the modern machinery, Khattak said.

Non-availability of loans and financial facilities to the construction industry were the other impediments which Khattak counted in the way of growth of this sector. He proposed setting up of Construction Bank like some of the foreign countries which should provide guarantees and other banking products to the construction sector.
 

LOCAL CONSTRUCTION FIRMS GET ONLY FOUR CPEC PROJECTS

LAHORE: The government has allocated only four projects to the local constructors under the China-Pakistan Economic Corridor (CPEC), and those too under strict conditions, Sikandar Hayat Khattak, Chairman, Constructors Association of Pakistan (CAP), said.

The conditions of these projects are so stringent that hardly any local construction firm will qualify for it, Khattak said while talking to The News on Tuesday.

Chinese firms were being given huge incentives besides income tax and other duty exemptions on the CPEC projects, while the local industry was not being provided with a level playing field, he added.

The condition, to sign a joint venture (JV) with a local partner in mega projects has also been revoked by the government for the Chinese in CPEC-related projects, despite that a 70-30 percent JV was mandatory for foreign firms to develop the local sector, ensure technology transfer and human resource development, Khattak added.

He said the Chinese companies were only sub-letting earth work to the local constructors, which was much lower than their working capacity. The CAP chairman said the local industry was able to compete with international constructors.

Both M-I and M-II were completed by the local constructors when the Turkish contractor left the M-I project and the other sub-let almost all the M-II work to the local constructors, he added. In Murree Road Project also the local constructor supplied pre-mix due to their expertise in the sector.

We are requesting the ministry of commerce and Federal Board of Revenue (FBR) to increase the age of import for used construction sector machinery to 15 years instead of 10 years. Latest modern machines use 100-Octane fuel which is not available here, while the available fuel in Pakistan destroys these machines causing losses to the sector, Khattak said.

The non-availability of loans and financial facilities to the construction industry, due to the sectors high-risk ranking, was also hampering growth, he added.

 Pakistan needs a construction bank like Turkey, China, and India, which will provide guarantees, and other banking products for the construction sector, he said, and added that he believed this would result in tremendous growth of the construction sector.

The CAP chairman also said the government can revive the Pakistan Steel Mills in the wake of the ongoing construction work of the China-Pakistan Economic Corridor (CPEC) development projects.

Huge quantity of iron products are being used in all types of construction and development projects of the CPEC, which is enough for the revival of the PSM as all its production can be consumed. Currently, it being imported from China by the Chinese companies, he said.  Talking about political involvement in awarding the public sector development and construction projects, Khattak said Khyber Pakhtunkhwa was almost free from such involvement, while in Punjab, this was huge. No work seems to be possible without political involvement in Punjab, he said.

 

PEC FACILITATES CONSTRUCTION FIRMS

LAHORE: Pakistan Engineering Council (PEC) realizing the issues being faced by construction companies because of the condition of employing apprentice engineers has exempted the construction companies in categories from C-2 to C-6 from hiring the services of apprentice engineers.

Exemption was given in the Governing Body meeting of the Pakistan Engineering Council, after a long struggle by the Construction Association of Pakistan (CAP), held recently which reviewed the issue being faced by the construction industry due to the condition and its financial impact on companies. The governing body meeting approved to give exemption to C-2 to C-6 categories construction companies.

The Chairman Constructors Association of Pakistan (CAP) Engr. Sikandar Hayat Khattak congratulated the Association members in a statement issued here on Monday. He said that the PEC Governing Body has also approved that the companies in C-A category would hire 3 engineers, C-B will hire 2 engineers and C-1 Category Company will acquire services of only one engineer.

On the issue of demand of higher salaries, CAP chairman said that the Apprentice Engineers will be Rs.20, 000/- per Month.  If any engineer demand higher, that may be reported to Chairman PEC with the name and PEC number for taking necessary action, he added.

If any constructor doesnt fined apprentice engineers in the market, he may write to the PEC about their projects and demand the Apprentice Engineers for appointment and inform CAP office for facilitation, he added.

 

CONSTRUCTORS HOPE THEIR PEC LICENSES WILL BE RENEWED AFTER A LAPSE OF 4 MONTHS.

CIRC recommended a way out for the Problem

LAHORE: Construction Industry Regulations Committee (CIRC) of the Pakistan Engineering Council (PEC) has approved that the constructors can get their licenses renewed by the PEC after submitting an undertaking that the construction companies will employee apprentice engineer.

Welcoming this decision, Constructors Association of Pakistan (CAP) Chairman Engr. Sikandar Hayat Khattak in a statement issued here, has expressed the hope that the issue of renewal of their PEC licenses will also be resolved shortly.

Constructors were facing difficulty in the renewal of their PEC licenses because of the revised guidelines of the PEC.   In absence of renewal of PEC license, the constructors were losing their business because of the condition of employment of supervisory engineers, he added.

Construction Industry Regulations Committee (CIRC) of the PEC has now approved that the PEC will obtain an undertaking from the contractors for renewal of their licenses.  The undertaking will state that the contractors will employee engineers possessing a Supervisory license as per approved requirements of each category after the approval of employment of engineer as per apprentice engineer by the Government. In that case, the constructor will pay Rs. 5,000/- per month to the engineer while balance amount will be paid by the Government.

The Chairman, Constructors Association of Pakistan (CAP) Engr. Sikandar Hayat Khattak and Executive Committee Members also put in concerted efforts to resolve the issue of Supervisory Engineers to be employed by the constructors as given in the revised guideline of PEC effective from 1st January 2017.

It is expected that with the decision of CIRC, the PEC will start the renewal of Constructors licenses on an immediate basis and clear the deadlock in the shortest possible time, said the CAP Chairman Engr. Sikandar Hayat Khattak.

 

CONSTRUCTION COMPANIES WILL HIRE INTERNEES INSTEAD OF SUPERVISORY ENGINEERS

LAHORE: The Federal Government has decided that the domestic construction companies will be responsible to hire services of internee engineers instead of supervisory engineers to ease financial burden on the construction companies which they were facing because of the revision of guidelines by the Pakistan Engineering Council (PEC).

The new guidelines had been implemented for the fresh and renewal of Constructors license from 1st January 2017. 

Nevertheless, it had created problems of the constructors in renewal of licenses. The renewals for the year 2017 are still pending due to requirement/availability of Supervisory Engineers.

A Constructors Association of Pakistan (CAP) delegation headed by its Chairman Engr. Sikandar Hayat Khattak raised the issue in a meeting with the Federal Secretary Science & Technology Fazal Abbas Maken the other day. Pakistan Engineering Council was represented by Engr. Ameer Zameer. Other CAP delegation members were Naeemuddin Siddiqui, Engr. Syed Iqbal Younus, Khawaja Shoaib Mohiuddin and Ikram ul Haq Chaudhry.

PEC representative Engr. Ameer Zameer informed the meeting that the Standing Committee on Science & Technology had already changed the condition and now it would be mandatory for the construction companies to hire internee engineers. The company will be responsible to pay Rs 5000 per month to any such internee engineer while rest of the pay will be paid by the government.

The CAP delegation had complained in the meeting that the Supervisory engineers were demanding Rs. 200,000 to 300,000/- per year without work.  In some cases they are selling their Supervisory Certificates. CAP feels that when the engineer has no practical experience, how he can supervise the work.  He should first get the training in his trade and he should be designated as Trainee Engineer, Sikandar Hayat Khattak recommended and also added that PEC should not delay issuance of constructors licenses citing supervisory engineers recruitment as an issue.

The CAP Chairman also proposed that while awarding points for ranking of construction companies to award them license, the PEC should also give points for having diploma engineers, office staff and construction machinery.

The meeting also discussed increase in fee and other revisions made by the PEC and Constructors recommended that the PEC may be asked to observe the findings of the Islamabad High Court and the Act of PEC in this regard.

Engr. Sikandar Hayat Khattak also proposed the federal government to set up Construction Industry Development Board on the pattern of Malaysia to help boost the domestic construction industry for resolving the issues being faced by the Constructors.

The Federal Secretary asked the Association to prepare a presentation in this regard to be given to quarters concerned.

 

CAP ESTABLISHES HELP DESK AT PEC HEADQUARTER AND REGIONAL OFFICES AT LAHORE, KARACHI & PESHAWAR TO GUIDE AND HELP THE CONSTRUCTORS

LAHORE: Constructors Association of Pakistan (CAP) has established a help desk at PEC headquarter, Islamabad, PEC Regional Offices, Lahore, Karachi Peshawar to provide guidance and help the constructors in completing the file for registration with the PEC.

 CAP has nominated Muhammad Usman at PEC headquarter, Islamabad, Mohammad Mushtaq Malik at PEC Regional Office, Lahore, Asif Mahmood at PEC Regional Office, Karachi and Ghulam Farooq at PEC Regional Office, Peshawar for the help desk concerned.

 Decision to this effect was taken at a meeting held between Constructors Association of Pakistan (CAP) and Pakistan Engineering Council (PEC). Other representatives of both the sides were also present on this occasion.

 PEC has notified the establishment of this help desk and conveyed to all the Deputy Registrars/In charge help desk at PEC headquarter and Regional Offices concerned to provide Help Desk at proper place to CAP representatives.

 According to the TORs, the CAP representatives will abide by the PEC Rules & Regulations instructions issued from time to time. Directly work under the Control of Additional/Deputy Registrar (Registration), in charge of office concerned. These nominees will guide and help the constructors in completing the file for registration with PEC, report to PEC Complaint Cell or concerned offices in case of any clarification resolving the issue and shall maintain the record of the applications.

 These nominees will not indulge in any other affair of the PEC, will submit the reports of applications processed on daily basis to the Registrar PEC and CAP will be responsible if he/she indulges in any unfair means within or outside PEC pertaining to constructor cases.

 

CAP INKS MOU WITH THE LCCI TO USE ITS MEDIATION DESK SERVICES

LAHORE: Constructors Association of Pakistan (CAP) and the Lahore Chamber of Commerce & Industry (LCCI) have signed a Memorandum of Understanding (MoU) by virtue of which the Association has declared LCCI as permanent venue for settlement of commercial, corporate and other disputes of its members and other groups through Arbitration and Mediation.

Constructors Association, as a result of this MoU, will refer disputes of its members and other relevant groups to LCCI for amicable settlement through mediation in accordance with LCCI Mediation Centre rules and regulations.

CAP Chairman Engr. Sikandar Hayat Khattak and LCCI President Abdul Basit inked the document on behalf of their organizations at a ceremony held the other day.  Chief Justice Lahore High Court Mr. Justice Syed Mansoor Ali Shah was also present on this occasion.

LCCI is providing and promoting the use of Alternate Dispute Resolution (ADR) mechanisms for resolution of disputes, including mediation by litigants and disputants so that disputes are resolved out of court and burden of caseload on judiciary is reduced thereby reducing time and cost of dispute resolution for litigants and disputants and increasing the efficiency of courts.

Both the parties will also establish effective consultation, co-operation and the exchange of information on mediation and CAP will encourage its members to use LCCI mediation centre for settlement of disputes. The LCCI will appoint permanent member of staff to serve as focal point for execution of the MoU while CAP will hold awareness events in form of seminars, workshops, presentations for its members and other stakeholders and invite LCCI to lead such events.

 Chief Justice Lahore High Court Mr. Justice Syed Mansoor Ali Shah has said that collaboration between Judiciary and private sector could be a game changer. Stay culture should be discouraged as it is hitting the economy hard. Nobody else could understand the value of time and money better than the business community therefore business disputes should be resolved instead of wasting time.

 Chief Justice Lahore High Court said that we have to find out new ways for dispute resolution to save precious time and money. He said that concept of mediation is being promoted rapidly and the Lahore Chamber of Commerce & Industry has taken an important initiative through establishing Mediation Center. He invited the Lahore Chamber of Commerce & Industry to form a focal committee that should be integrated with the system of Lahore High Court through information technology.

 He informed the LCCI members that for the first time in history, an Alternate Dispute Resolution Center is being established in the District Court in collaboration with the World Bank that would be inaugurated soon. He said that Punjab Judicial Academy is ready to extend cooperation to the Lahore Chamber of Commerce & Industry for conducting courses regarding mediation.

 He said that courts have already the burden of criminal cases. therefore, contractual issues should be resolved through mediation. Concept of neutral evaluation and pre-litigation assessment is gaining grounds throughout the world. It would be better if businessmen first come to the LCCI Mediation Center for pre-litigation assessment, Justice Syed Mansoor Ali Shah added.

 Speaking on this occasion, CAP Chairman Sikandar Hayat Khattak appreciated the efforts of the LCCI for setting up mediation centre to resolve the issues being faced by its members or other sections of trade and industry out of the court and on emergent basis. He said that they would be encouraging their members to take full advantage of this service of the alternate dispute resolution mechanism.

The LCCI President Abdul Basit said that no country could achieve the goal of economic development without rule of law. He said that the Lahore Chamber of Commerce & Industry established the Mediation Center for out-of-court settlements of the business disputes. He thanked Chief Justice Lahore High Court for patronizing the LCCI Mediation Center saying that support of Judiciary would make this Center more effective. He said that legal powers would help LCCI Mediation Center to resolve the business disputes at early stages that would certainly reduce the burden of courts.

 Eng. Sohail Lashari said that the Lahore chamber of Commerce & Industry established the Mediation Center in 2012 in collaboration with IFC. He said that the objective of this mediation centre was to help local and foreign companies to resolve their business/commercial disputes out of court. In this way, companies are able to maintain a healthy relationship amongst themselves as well. He said that Pakistan legal system besides being over loaded, tends to take lot of time, as such mediation can be the quickest and most effective mode of alternate dispute resolution and at the same time helping lessen the burden on the Courts.

Later, Chief Justice Lahore High Court Justice Syed Mansoor Ali Shah inaugurated the LCCI Mediation Center.

 

BID FOR CONSTRUCTION OF PACKAGE II OF WESTERN ROUTE OF CPEC IS READY

local NHA contractors who are CAP members too are to participate in it

ISLAMABAD: Bidding preparations for two parts of Hakla-D.I.Khan Motorway (Package II) are in final phase and bids are likely to be invited from the members of the Constructors Association of Pakistan (CAP) as per the promise made by the Chairman National Highways Authority (NHA) during a series of meetings with him by the CAP representatives asking to allocate local constructors to bid for the package II of the Western Route of CPEC. 

CAP in a letter to NHA Contractors and members of the CAP disclosed this. He said that Package II has been divided in to four parts and bidding is ready for two of these four parts and may be held in next week.

It may be worth mentioning that the NHA Chairman Shahid Ashraf Tarar had requested the Prime Minister of Pakistan Muhammad Nawaz Sharif to allow offering two out of three remaining contracts of Western Corridor (D. I. Khan - Hakla Motorway) exclusively to the local contractor/ consortium through bidding.

Tarar had sought the permission in a letter to the Prime Minister after a detailed meeting with Constructors Association of Pakistan (CAP) members recently which discussed the in details different issues being faced by the construction industry including involving local contractors in construction of Western Corridor.

NHA Chairman had also allowed the local construction companies to form a consortium of up to five companies to bid for these contracts on the request of the Constructors Association of Pakistan (CAP) which pleaded that the local contractors cannot compete with International contractors in competitive bidding due to lack of experience.  Construction industry of Pakistan is in process of evolution and such mega projects are not executed frequently in the country.

After detailed discussion and reservation Chairman NHA agreed with the view point of CAP and allowed forming of consortium and offering exclusively two contracts to local contractors.

Speaking on this occasion, Chairman NHA advised CAP members that local contractors may participate in the program of Public Private Partnership/Built Operate & Transfer. Operation & Maintenance contracts of different stretches of National Highways will be tendered on short term basis and local contractors will be encouraged to participate in the process. Chairman NHA also advised that the participating contractors may also submit a business plan for consideration.

CAP members appreciated the interest taken by Chairman NHA in resolution of issues raised by Constructors Association of Pakistan and accordingly expressed their willingness to extend all the help in this regard to improve the conditions of the construction industry in the country.

CONSTRUCTION EQUIPMENT, MACHINERY: CAP URGES FBR TO ABOLISH IMPORT DUTY

LAHORE: The Constructors Association of Pakistan (CAP) has urged the Federal Board of Revenue (FBR) to waive off the import duty on construction equipment and machinery to help construction companies mechanise operations. 

CAP Chairman Engineer Arshad Dad, in a letter to the revenue chairman, has drawn the attention towards the duties and taxes ranging from 33 to 65 percent, which adds to the already high priced items specially vehicle mounted machinery and excavators, bulldozers. He said under such heavy duties Pakistani construction companies could not even afford second hand equipment and machinery which is being auctioned in UAE. 

On a recent auction by a world renowned company in Dubai, he said these second-hand equipment and machinery were unaffordable considering the reserve prices, for Pakistanis with the present duty and tax structure. "Another impediment is that second hand machinery older than 10 years cannot be imported in the country. The price of even 10 years old machinery is unaffordable adding to this the duty and taxes and the total price become exorbitant," he said. "Plant, Machinery, Equipment and Construction Material which are not manufactured locally were previously allowed Benefit of Duty, Advance Sales Tax, Additional Sales Tax and Advance Income Tax on reduce rates vide, S.R.O.530(I)/2005 and S.R.O.575(I)/2006. At present, No SRO benefit is allowed. Only FTA with China is applicable with some percentage concession for customs duties, while Advance Sales Tax and Income Tax benefits are not available. 

"Under the above circumstances the Pakistani Construction Industry (specially the SME s) are unable to mechanise their operation and increase capacity. This also hinders the adoption of new technology and innovations, thus limiting the local companies to deliver larger projects thus making country dependent on foreign contractors who charge much higher rates." 

The CAP Chairman also suggested that the above facilities only be allowed to constructors who hold a valid license from Pakistan Engineering Council and get a project specific certificate from Constructors Association of Pakistan to ensure transparency and avoid misuse of such incentives.

 

CAP DEMANDS PRICE ADJUST IN COMPETITIVE BID FOR WINDAR DAM PROJECT

LAHORE: Constructors Association of Pakistan (CAP) has urged the Water and Power Development Authority (WAPDA) to derive a Price Adjustment Formulae to beadded in to the contract document for competitive and transparent bids for the construction of Windar Dam Project.

In a CAP letter to the General Manager, Planning and Design Water, Water and Power Development Authority (WAPDA) Zahid Hussain Khan has requested the Authority to implement conditions for price adjustments provided in the PEC bidding documents as notified by Planning Commission, PPRA and PEC; and further elaborated by PEC in Standard Procedure and Formula for price adjustments notified in March 2009. It has also been incorporated by PEC in the PEC Standard Form of Bidding Documents for EPC/Turnkey Contracts under Para 6 of D- Particular Condition of Contract of PEC instructions to user of EPC/Turnkey document they emphasize that, The Employer should develop the formula and other factors for Price Adjustment based on the principle of PCC Clause 70.1 of PEC Bidding Documents for Civil Works, GCC sub-clause 15.2 of PEC Bidding Documents for Supply of Goods and Standard Procedure & Formulae for Price Adjustment prepared by PEC.

Since, the letter further said, several decades (for Civil Electro-Mechanical) Contracts have been formed on the principle of fair and equitable risk sharing between the Employer and the Contractor. These risks sharing principles have been beneficial for both parties, the Employer signing a contract at a lower price and only having further costs when particular unusual risks actually eventuate and the Contractor avoiding pricing such risks, which are hard to evaluate.

Considering the prevailing hyperinflation, insubstantial economy and uncertain fluctuations in prices in the country and in this scenario, introduction of unusual (EPC/Turnkey) project without its true spirit and fair condition will not only increase the bid price but also will restrict the participants in the bidding procedure.

We believe, the CAP General Secretary wrote, the transparency in procurement of works cannot be achieved until and unless the conditions provided in the Bid are not fair and transparent. Bids conditions for the subject project can be made fair and transparent by the implementation of PEC conditions. He suggested that in the better interest of WAPDA as well as to avoid spoiling the national assets i.e., contractors a price adjustment formula should be derived and added in the contract document. He also stated that the foreign currency component in accordance to the PEC instruction for this type of EPC/ Turnkey Projects.

 

CAP JOIN HANDS WITH PSDF TO IDENTIFY SKILLS REQUIREMENT

LAHORE: Punjab Skills Development Fund (PSDF) joined hands with the Constructors Association of Pakistan (CAP) to identify the skills shortages in the construction sector and to devise an intervention for the industry.

Both the organizations arranged a workshop Skills Need Assessment for the Construction Sector which brought together coherent forces within the construction sector coupled with the training institutes for better understanding the skills shortages and to devise an intervention for the industry.

Addressing the participants, Chairman Constructors Association Pakistan (CAP) Afzal-ur-Rahman appreciated PSDF efforts for the construction sector. He also lauded Governments efforts to improve productivity of manpower through various interventions especially by PSDF. He said that by utilizing PSDF expertise in skills development, the construction industry will get a much needed boast as trained labour will be better equipped with all essential skill set to take on the future challenges. Unfortunately Construction sector is an unorganized sector in Pakistan and there is no Ministry or department which owns this sector and we are still in search of a Ministry which may provide us a shelter so that we can organize this sector in a befitting manner.

CAP Chairman added that the Construction Industry is playing important role by providing on Job training to unskilled workers and as per a rough estimate suffering loss of approx Rs. 50 billion per year on account of non-availability of required skills of the construction workers. The losses are due to inefficiency and poor workmanship resulting in loss of productivity or poor quality in the work which increase wastages. The Productivity of Construction labour can be increased by improving skills through Training. For example if a standard Bench Mark for a Mason to execute and complete 12mm plaster in a day shift is 100 Sq feet, untrained mason may achieve 60% of the Bench Mark which is not acceptable but trained mason may achieve 75% of the Bench Mark which may be acceptable but the productivity can further be improved beyond the standard Bench Mark i.e upto 125% under a Bonus arrangement or through a higher or better wages which is beneficial both for the Mason and the Employer. 

The Construction Workers which are trained by the local industry get the Jobs in overseas markets and Pakistan at present receiving Foreign remittance of 14 US Billion $ and out of this approx 8 US Billion $ are related to Construction Workers which is a back bone of the economy.

To save the losses and to increase the economic activities the only way forward is to provide vocational training and to develop the necessary skills to unskilled workers which can meet the local and overseas demands and Punjab Skills Development Fund, UK Aid and ILO can certainly play their part to accomplish the required objectives. We will certainly see the improvements in the following areas if a proper training is provided, Afzal ur Rehman added.          

Talking about the training skills needed, CAP Chairman said construction workers need to know how to operate a variety of simple and more complex tools and machines and work with different building materials. They also need to have basic or more advanced math skills; knowledge of design, chemistry and physics principals and laws relating to construction; the ability to lift heavy materials and understand written and oral instructions and / or basic or more advanced communications skills.

Construction skills can increase earning potential of the Construction Worker and employment options by obtaining certifications in a number of different areas. Proper Certification in concrete finishing, Form Work, scaffold erecting and dozens of other skills may provide value addition not only in the skills but increase in wages of Construction Worker. Construction workers who specialize in one of these niche skills are often in greater demand than those who have only general training.

He also called for creating awareness of safety issues which will be helpful for a Construction Worker for his safety and the safety of others as well as the Project and accidents can be avoided.

Speaking at the opening session PSDF CEO Mr. Ali Sarfraz said that the workshop will enable PSDF to design a scheme that directly addresses the needs of the Construction Industry. He said that the Fund has already launched a specialized scheme Skills for Garments _ for provision of better skilled manpower to the Garments Sector. PSDF in its past and current schemes - Skills for Employability & Skills for Job - introduced trades that focus on producing skilled labour such as masons, shuttering carpenters, steel fixers, plumbers etc.

Workshop was attended by the CAP Senior Vice Chairman Ayub Sabir Izhar of Izhar Construction (Pvt.) Ltd, Chairman ABAD, North Zone and former CAP Chairman Engr. Akber Sheikh of Guarantee Engineers, CAP Vice Chairman (Punjab), Zahid ul Hassan Qureshi of Progressive Construction Company, CAP Vice Chairman (KPK), Ghulam Habib of Ghulam Habib & Company (Pvt.) Ltd, CAP Executive Committee Members, Sailfullah Zia of Zoom Engineers, Maqsood Ahmad of Fareed Company (Pvt.) Ltd, Tazeem Ahmad of Maahar Builders & Developers, Sabir Hussain Javed of Iftikhar and Company, Fawad Islam Ch of Newcon Associates, CAP Members, Engr. Zafarullah Khan of Zee Khan Associates (Pvt.) Ltd, Sardar Muhammad Ishaq Khan of Buildeco Pakistan (Pvt.) Ltd, Engr. Saeed Iqbal of Rockwell Corporation (Pvt.) Ltd, Rana Muhammad Tariq of Rana Construction Company,  Brig. Ghulam Haider of Chaudhry Construction  Company, Col. Muhammad Azam of Habib Construction Services (Pvt.) Ltd, Ch. Ahmad Habib of Uni Build Associates (Pvt.) Ltd, Sajjad Hussain of Rimtaj Industries MG (Pvt.) Ltd, Iftikhar Ahmad Khan of Iftikhar & Company (Pvt.) Ltd, Amer Mahmood of Mishal Sania (Pvt.) Ltd, Arshad Majeed Bhatti of Izhar Construction (Pvt.) Ltd, Arif Ali Khan of Izhar Construction (Pvt.) Ltd, CAP Acting Secretary General Jabbar Butt and PSDF officials.

The workshop for construction industry was second in series of workshops planned by PSDF for potential growth sectors. The first workshop was dedicated to garments sector and led to the launch of PSDF scheme for garments sector  Skills for Garments. Other workshops planned will target light engineering, footwear, food processing and furniture sectors

Punjab Skills development Fund (PSDF) is a section 42 company, established by the Government of the Punjab in collaboration with the Department for International Development (DFID), UK. PSDF funds vocational training organisations for providing vocational and skills training to the poor and the vulnerable populations of fourteen districts of South Punjab Bahawalpur, Lodhran, Muzaffargarh, Bahawalnagar, Vehari, Khaewal, Rahim Yar Khan, Lahore, Sargodha, Gujranwala, Faisalabad, Chiniot, Sheikhupura & Sialkot. 

Constructors Association of Pakistan (CAP) soon after its inception in 1998, incorporated under the Companies Ordinance 1984 vide licence No.: 143 granted by Ministry of Commerce, affiliated with the Federation of Pakistan Chambers of Commerce & Industry as A-class association, to address the problems facing the construction industry.

 

CAP TO COOPERATE WITH PRA ON SALES TAX

LAHORE: Responding to the request of the Constructors Association of Pakistan (CAP), the Punjab Revenue Authority (PRA) has agreed that the sales tax may be paid on collection basis and if collection comes on installment basis, it may be deposited to the extent of installments received.

PRA Authorities, however, made it clear that where payment has been received in advance, tax shall be paid accordingly in terms of item of sub-section (2) of section 18 of the Punjab Sale Tax on Services Act, 2012.

Responsibility to collect and pay sales tax is on the tax payer (service provider) and recovery of tax from buyers (service recipient) is the responsibility of the tax payer. PRA is not required to take any direct action in the regard. PRA will however, extend constructors all possible guidance and support towards recovery. Such cases may be reported to PRA after every three tax periods on regular basis, said PRA Chairman Iftikhar Qutab during a meeting with a CAP delegation led by its chairman Engr. Akber Sheikh.

PRA further stated since Punjab sales tax on construction services is on fixed basis (which is much on lower side as compared to standard tax liability), PRA apprehends that input tax adjustment, if allowed, may grossly and negatively impact the tax yield besides creating problems of assessment and record keeping. The association may please guide PRA on the desirability of disallowing input tax adjustment. PRA hopes that your guidance will make the sale tax system on construction services more convenient, realistic and harmless to the governments legitimate tax rights, the PRA Chairman Iftikhar Qutab said.

It may be added here that the Punjab government had announced to bring 16 more sectors under the scope of the provincial sales tax on services with effect from July 01, 2013. According to a notification number SO (TAX)1-2/97 issued by the Finance Department of the Punjab Government with effect from July 01, 2013 the list of services on which the Punjab Revenue Authority (PRA) will collect the sales tax on services has been extended further.

The newly added sectors include services provided by software or IT-based system development consultants, services provided by technical, scientific and engineering consultants, services provided by other consultants, services provided by tour operators (other than Hajj and Umrah), manpower recruitment agents, services provided by the security agency, services provided in respect of mining of minerals, oil and gas including related surveys and allied activities.

Besides this service being provided by advertising agents, share transfer agents, business support services, services by property dealers, fashion designers, architects/town planners and interior decorators, rent a car, car/automobile dealers and services provided in respect of manufacturing or processing on toll or job basis (against processing on conversion charges) have also been brought under the scope of provincial sales tax.

A delegation of Constructors Association of Pakistan (CAP) led by Engr. Akber Sheikh, Chairman CAP, comprising of Engr. M. S. Asad Mukhtar, Chairman, Banu Mukhtar Contracting (Pvt.) Ltd and Mr. Marghoob Shakir Izhar, Director, Izhar Construction (Pvt.) Ltd, also met Mr. Iftikhar Qutab, Chairman, Punjab Revenue Authority and other senior officials to submit their proposals with regard to levy of the provincial sales tax.

The CAP in the meeting and later through a letter had urged the PRA that the sales tax be held payable, to PRA, after payment of the invoice (including sales tax component) by the purchaser of service (under section 18 (3) of the sales act). In case of nonpayment of sales tax by the purchaser of service, he shall be held responsible, by PRA, for the amount due (under section 11(4)). This will remove the distinction between resident and nonresident service suppliers.

Chairman CAP said that CAP member contractors are all registered as formal sector. CAP therefore, has no hesitation in encouraging registration of contractors with the provincial sales tax authority.

CONSTRUCTION INDUSTRY VITAL FOR ECONOMIC GROWTH AND INFRASTRUCTURE DEVELOPMENT: PRIME MINISTER

ISLAMABAD: Prime Minister Syed Yousuf Raza Gilani has said that the construction industry is very important for countrys economic growth, infrastructure development as well as employment generation. The government, he said, would take steps for solving its problems and ensuring its growth and progress.

The Prime Minister said this while talking to a delegation of All Pakistan Contractors Association (CAP), led by Engr. Shahid Rafiq, Chairman, All Pakistan Contractors Association (CAP) who called on him at the PM Secretariat this evening.

The Prime Minister asked all the concerned ministries to adopt a concerted approach in consultation with the representatives of CAP for removing the difficulties, which the construction industry is facing.

The Prime Minister asked the construction industry to train manpower not only for meeting the countrys domestic requirements but also the needs of the foreign markets. He asked the representatives of CAP to keep liaison with government bodies like TEVTA and NAVTEC in this regard.

The representatives of the construction industry assured the Prime Minister that despite operational difficulties they would gear up efforts so that the governments vision of ensuring housing for all can be achieved.

The Prime Minister was apprised that the construction sector provides direct employment to unskilled labour who are trained in various disciplines. He was further informed that 29 local technology based industries are directly related to the construction business.

CAP delegation also briefed the Prime Minister about the potential in the construction sector with regards to improving national economy, infrastructure development and employment generation in addition to meeting the housing needs of the people.

The Prime Minister was further informed that the construction sector of the country is almost entirely working within the country and if it gets organized the sector has the potential of exporting its labour as well as consultancy services which can help the country earn foreign exchange worth billions of dollars.

Deputy Chairman Planning Commission, Chairman FBR, Secretary Communication, Secretary Industries & Production, Secretary Housing, Engr. Shahid Rafiq, Chairman, All Pakistan Contractors Association (CAP), Muhammad Ayub Sheikh, Vice Chairman CAP (Punjab), Engr. Kamal Nasir Khan, Vice Chairman CAP (Balochistan) Engr.  Abdul Karim Khadim, Vice Chairman CAP (Balochistan) Engr. Arshad Dad, Management Committee Member CAP and Engr. Syed Ashfaq Hussain, Management Committee Member CAP also attended the meeting.