ISLAMABAD: Transparency International-Pakistan (TI-P) has sought an inquiry into allegations of tax evasion exceeding Rs 3 billion by a joint venture in Dasu hydropower project.
In a letter to Chairman Wapda and Chairman Federal Board of Revenue, TI-P, said that it has received a complaint against evasion exceeding Rs. 3 billion by the joint venture comprising GE Hydro China Co. Ltd and Power China Zhongnan Engineering Corporation Ltd (“GE-PC JV”) in connection with the USD 254 million plus Rs 25 billion Dasu Hydropower Project (DASU-EM-01) – Procurement of Plant, Design, Supply, Installation, Testing, and Commissioning of Hydro-Mechanical and Electrical Equipment. The project is being executed by Wapda in District Upper Kohistan, Khyber Pakhtunkhwa Province.
The allegations, if substantiated, represent a grave violation of Pakistani tax laws, procurement regulations, and anti-corruption frameworks, undermining public trust and fiscal integrity.
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TI-P received the following complaint: (i) in November 2019, Wapda awarded the GE-PC JV a contract for plant design, supply, and installation, with an effective date of February 1, 2021; (ii) despite operating under Pakistani law, the GE-PC JV remains unregistered with the Pakistan Engineering Council (PEC), Securities and Exchange Commission of Pakistan (SECP), and Federal Board of Revenue (FBR), thereby concealing beneficial ownership and evading regulatory oversight; and (iii) both JV partners are individually registered with FBR: GE Hydro China Co. Ltd. (NTN: 4706919) and Power China Zhongnan Engineering Corporation Ltd. (NTN: A115649).
TI-P argued that no JV-specific registration exists. Wapda failed to deduct and deposit the mandatory 7 percent withholding tax (WHT) on all payments to the JV since contract inception, resulting in evasion exceeding Rs. 3 billion. Such evasion constitutes money laundering under Pakistani law, warranting immediate debarment of the JV partners and recovery of outstanding taxes, penalties, and fines under the Income Tax Ordinance, 2001.
TI-P reviewed the allegations of the complaint, prima facie, and the allegations seem correct.
In its letter, TI-P requested both the Chairman Wapda and Chairman FBR that the allegations indicate a failure by both the GE-PC JV and Wapda to comply with statutory obligations, including WHT deductions and regulatory registrations, adding that non-compliance with the SECP Act, 2017, and PEC Ordinance, 1976, potentially obscures accountability and exposes the project to risks of undue influence and corruption. If found correct, these lapses not only erode revenue streams essential for national development but also trigger liabilities under the Anti-Money Laundering Act, 2010, including criminal prosecution.
Both the top men of Organisations have been requested to examine the serious allegations and initiate a comprehensive audit of all payments made to the GE-PC JV since November 2019,verifying WHT deductions, deposits, and JV registrations and launch a formal inquiry into the beneficial ownership of the JV partners and reasons for non-compliance with PEC and SECP requirements.
“If the allegations are confirmed, enforce debarment of the JV from future public procurement including imposition of penalties and fines under the Income Tax Ordinance, 2001, and recovery actions under anti-money laundering laws,” said Daniyal Muzaffar, Trustee/Legal Advisor TI-P.
Wapda Chairman has been requested to publicly report the outcomes to restore transparency and deter similar infractions.
Copyright Business Recorder, 2025