In an interview with ER, Chief Executive, Firm Decon International says: The private sector companis’ share is declining in Pakistan
Where Does the Construction Industry Stand in Pakistan?
The overall condition of the construction industry in Pakistan is not very promising at the moment, especially in the private sector. There are many challenges. The number of projects is not sufficient to match the capacity and efficiency of companies. This issue has persisted for the past three to four years. In fact, the situation did not improve after COVID-19, as many had hoped.
The private sector’s share is also declining, as public sector companies—who should not compete directly—are now actively participating in bids and winning projects. This severely affects private contractors and reduces their opportunities.
Low Interest Rates and Stabilizing USD
Interest rate is only one of many factors impacting the industry. A whole series of issues creates hurdles. One of the major problems is the limited financial capacity of companies in the public sector bidding process, especially when it comes to requirements like security bonds. The conditions are so strict that many companies cannot meet them. As a result, the capacity of even technically capable public sector companies cannot be built.
If banks offer financial support with easier conditions, many of these companies could perform exceptionally well. Moreover, governments should release project payments on time so that companies are not forced to rely on bank financing. In such cases, interest rates do matter.
But the core issue remains the need to enhance the financial capacity of companies. The government should establish a Construction Bank and register credible construction companies. Many Pakistani companies have worked abroad and earned international recognition. Meanwhile, Indian companies have witnessed rapid growth in the Middle East and other markets, while very few Pakistani firms have secured projects there. The main reason behind this gap is financial limitations—both domestically and internationally.
Boom in KSA and Role of the Pakistani Government Most Pakistani companies operating in Saudi Arabia are either EPC contractors or subcontractors to foreign or Indian firms. There is a lack of support and facilitation. In the 1980s, many Pakistani companies were active in the Middle East. Conditions were favorable, and Pakistanis had a credible image.
Now the situation is different—no easy terms, no financial facilitation, and no meaningful support from the federal government.
Construction Bank and Its Acceptance in Pakistan
The Pakistan Engineering Council (PEC), under the leadership of Engr. Jawed Salim Qureshi, worked extensively on the idea of establishing a construction bank and held discussions with the State Bank of Pakistan. I also gave some suggestions, and the council had good resources to support such an initiative. However, to move forward, they were asked to reach a certain paid-up capital requirement in order to get permission to set up the bank.
PEC’s Role
The PEC must broaden its role beyond being just a regulatory body. It should not restrict itself to contractor registration only. It should focus on the welfare of engineers in Pakistan. The council must revise its bylaws to expand its scope. Employment of engineers is a critical issue. I believe around 50,000 engineers are currently unemployed. I suggested that Pakistani diplomatic missions abroad should be tasked with helping engineers secure jobs in foreign countries. Additionally, PEC should prioritize research and development, as it has adequate resources to do so. One of the key reasons for the growing unemployment among engineers is the mushroom growth of engineering universities across Pakistan.
Why Engineering Is Losing Its Appeal Among Youth
Naturally, when engineers cannot find jobs, they lose interest in the field. How are they supposed to survive in a state of unemployment? I’ve seen engineers working as waiters in hotels.
PEC must take immediate action against universities that do not meet the basic criteria of an engineering institution. Besides PEC, engineering societies must also step forward. We have formed a group called the Pakistan Society of Civil Engineers, which is run through our own resources. We organize monthly technical lectures for young engineers. I believe other branches of engineering should also establish similar groups.
We also aim to initiate research on construction codes, such as seismic standards and others. However, we need funding to engage scholars and conduct quality research.
Our Company
We started operations in 1992, offering soil investigation services. At that time, we were among the very few companies working in this field. Between 1992 and 2003, we expanded into piling, tube wells, and various other types of testing. Later, we set up our own laboratory.
After 2003, we moved into transmission line projects and grid station design. We also conduct topographic surveys and are actively working in the solar energy sector. We are essentially a service provider in the infrastructure and energy domains.
Engineer-Owned Company: A Key Difference
It makes a big difference when the owner of the company is an engineer. In case of a new project, I address and resolve technical issues properly—no shortcuts. An engineer does not compromise on quality like a non-engineer might. Anyone who visits our lab can see the standards and professionalism that reflect an engineer’s commitment to engineering excellence.
