A financial dispute involving Rs 23 billion between National Grid Company (NGC) and Pak Matiari–Lahore Transmission Company (PMLTC) has now been presented to the China-Pakistan Economic Corridor (CPEC) Review Committee, chaired by Minister for Planning, Development, and Special Initiatives Ahsan Iqbal, Business Recorder reported.
The issue stems from PMLTC’s claim that NGC is refusing to pay Provincial Sales Tax on transmission service invoices, despite the tax becoming applicable in July 2023 and being stipulated as a pass-through cost under the Transmission Service Agreement (TSA). This refusal has led to an outstanding tax liability of Rs 22.8 billion, due to be paid to the Punjab Revenue Authority and Sindh Revenue Board.
Despite decisions from NEPRA and provincial tax regulations requiring the pass-through of these charges to Distribution Companies (DISCOs), the payments have not been made.
The non-payment has created significant challenges for PMLTC, including penalties, default surcharges, and cash flow problems. The company is seeking a change in the Income Tax Ordinance, 2001, to amend Clause (12A) of Part-IV of the Second Schedule, requesting the replacement of the word “to” with “by” to align with the Transmission Line Policy, 2015.
Alongside this dispute, the CPEC committee has also moved forward with the addition of the Saindak Copper Mine project to the Joint Working Group on Industrial Cooperation. The Petroleum Division has provided an update on this project’s progress.
In a separate development, the Chinese Embassy has submitted a draft protocol for the creation of the China-Pakistan Border Port Management Cooperation Committee and is awaiting confirmation from Pakistan on the authorities leading the initiative.
Addressing another issue, Minister Ahsan Iqbal held a meeting on October 23, 2025, to discuss delays in the provision of utilities to M/s Challenge Fashion, a priority investment project. The Minister directed the Board of Investment (BoI) to submit a summary to the Federal Cabinet, proposing criteria for providing utilities to Special Economic Zones (SEZs), ensuring that genuine investors and export-oriented businesses are prioritized.
In a further CPEC-related development, the State Bank of Pakistan (SBP) has been asked to issue a notification allowing the retention of 50% of export proceeds in the Gwadar Free Zone. A committee has been formed to explore legal amendments for a long-term solution, with a proposal to restructure the committee’s leadership, now potentially under the Ministry of Finance or the Ministry of Planning.
