ISLAMABAD: Transparency International Pakistan (TI Pakistan) has called upon the Water and Power Development Authority (WAPDA) and the Federal Board of Revenue (FBR) to initiate a formal investigation into allegations of tax evasion amounting to more than Rs3 billion by a Chinese joint venture working on the Dasu Hydropower Project in Khyber Pakhtunkhwa.
In a letter dated October 13, 2025, TI Pakistan informed both institutions that it had received a complaint accusing the joint venture of GE Hydro China Co. Ltd. and PowerChina Zhongnan Engineering Corporation Ltd. of systematic violations of Pakistani laws, including evasion of taxes and failure to register with the required regulatory bodies.
According to the watchdog, the joint venture was awarded a contract worth US$254 million plus Rs25 billion in November 2019 for the design, supply, and installation of electro-mechanical systems at the World Bank–financed Dasu Hydropower Project. The agreement took effect in February 2021. However, despite its operational presence in Pakistan, the joint venture reportedly remains unregistered with the Pakistan Engineering Council, the Securities and Exchange Commission of Pakistan, and the FBR. TI Pakistan said that while both companies possess individual tax numbers — GE Hydro China (NTN 4706919) and PowerChina Zhongnan (NTN A115649) — the joint venture itself lacks a collective registration, concealing its ownership structure and limiting tax oversight.
The complaint further alleges that WAPDA did not deduct the mandatory seven percent withholding tax from payments made to the joint venture since the contract’s inception, resulting in potential losses exceeding Rs3 billion to the national exchequer. TI Pakistan warned that if the claims are verified, the case could fall under the Anti-Money Laundering Act, 2010, and require debarment of the joint venture in addition to recovery of outstanding dues, penalties, and fines under the Income Tax Ordinance, 2001.
The organization said its preliminary review found the complaint to be prima facie credible, reflecting serious procedural lapses by both the contractor and the implementing agency. It said the matter demonstrates weaknesses in regulatory compliance, which could erode public confidence in major development projects. TI Pakistan urged the authorities to carry out a comprehensive audit of all payments made to the joint venture since 2019, verify withholding tax deductions and deposits, and investigate ownership irregularities. It also called for public disclosure of audit findings to ensure transparency and accountability in the management of public contracts.
TI Pakistan highlighted that non-compliance with the SECP Act 2017 and the PEC Ordinance 1976, if confirmed, could lead to criminal prosecution under Pakistan’s public procurement and anti-corruption laws. The organization clarified that it is acting as a whistleblower under Article 19-A of the Constitution, which grants citizens the right to access public information regarding the conduct of state institutions and officials.
Citing the 2023 Supreme Court judgment authored by Chief Justice Qazi Faez Isa, TI Pakistan reiterated that access to information is a fundamental right, transforming transparency from a privilege into a constitutional guarantee. Copies of the complaint have been sent to the Principal Secretary to the Prime Minister, the Federal Minister for Water Resources, the Chairman of the Pakistan Mega Infrastructure Council, the Director General of the Federal Investigation Agency, the Country Director of the World Bank, and the Registrar of the Supreme Court of Pakistan.
The watchdog concluded that strict enforcement of the rule of law and zero tolerance for financial irregularities remain essential to restoring public trust and ensuring integrity in Pakistan’s large-scale infrastructure projects.
