Transparency International Pakistan (TIP) has written to the Water and Power Development Authority (WAPDA) and the Federal Board of Revenue (FBR), raising serious allegations of income tax evasion exceeding Rs3 billion by a joint venture of two Chinese firms — GE Hydro China Co. Ltd. and Power China Zhongnan Engineering Corporation Ltd. — working on the Dasu Hydropower Project in Upper Kohistan, Khyber Pakhtunkhwa.
In a formal communication dated October 13, 2025, Transparency International Pakistan stated that it had received a complaint alleging that the GE-PC Joint Venture (JV), contracted under Dasu-EM-01, has failed to comply with Pakistani tax laws and regulatory requirements since the award of its US$254 million plus Rs25 billion contract in November 2019.
The project, executed by WAPDA, involves the design, supply, installation, testing, and commissioning of hydro-mechanical and electrical equipment for the massive Dasu Hydropower scheme — one of Pakistan’s flagship energy infrastructure initiatives.
Allegations of Tax and Regulatory Non-Compliance
According to the letter, the GE-PC JV allegedly evaded more than Rs3 billion in income tax due to non-deduction of mandatory 7% withholding tax (WHT) on payments made by WAPDA since the project’s inception. The letter claims that despite operating in Pakistan, the JV remains unregistered with the Pakistan Engineering Council (PEC), Securities and Exchange Commission of Pakistan (SECP), and the FBR, effectively concealing its beneficial ownership and evading regulatory oversight.
Transparency International noted that while both GE Hydro China and PowerChina Zhongnan are individually registered with FBR (NTNs 4706919 and A115649 respectively), the joint venture itself has no FBR registration, which violates statutory requirements.
“The allegations indicate a failure by both the GE-PC JV and WAPDA to comply with statutory obligations, including WHT deductions and regulatory registrations,” the letter said, adding that the lapses could trigger liabilities under Pakistan’s Anti-Money Laundering Act, 2010, and other fiscal laws.
Transparency International’s Recommendations
TIP’s legal advisor Advocate Daniyal Muzaffar recommended that the Chairman of WAPDA initiate a comprehensive audit of all payments made to the JV since 2019 to verify tax deductions and regulatory compliance.
He also urged WAPDA to launch a formal inquiry into the beneficial ownership of the JV partners and to determine reasons for non-compliance with SECP and PEC requirements.
“If the allegations are confirmed, enforcement actions should include debarment of the JV from future public procurement, recovery of outstanding taxes, and penalties under the Income Tax Ordinance, 2001,” the letter advised.
TIP further called on WAPDA to publicly disclose the audit and inquiry outcomes “to restore transparency and deter similar infractions in future infrastructure contracts.”
Broader Legal Context
Transparency International Pakistan emphasized that the alleged violations amount to more than fiscal misconduct, saying they undermine public trust, governance integrity, and Pakistan’s international anti-corruption commitments.
It reminded authorities that ignorance of the law is no excuse, and regulatory compliance is essential in all foreign-funded projects.
The watchdog cited Article 19-A of Pakistan’s Constitution — the “Right to Information” — under which it operates as a whistleblower, not a complainant, ensuring public access to government performance and financial transparency.
It also referenced a landmark 2023 Supreme Court judgment authored by Chief Justice Qazi Faez Isa, which established that “access to information is no longer a discretion granted through occasional benevolence, but a fundamental right of every Pakistani.”
Wider Accountability Push
Copies of the TIP communication have been sent to multiple high-level offices, including the Prime Minister’s Office, Federal Minister for Water Resources, DG FIA, PM Inspection Commission, and the World Bank’s Country Director, urging coordinated action under respective mandates.
The letter concluded by reaffirming Transparency International Pakistan’s stance on zero tolerance for corruption, asserting that the rule of law must apply equally to all — including multinational contractors working on strategic public projects.
