ISLAMABAD: A financial dispute of Rs 23 billion between National Grid Company (NGC) and the Pak Matiari–Lahore Transmission Company (PMLTC) has landed in the China–Pakistan Economic Corridor (CPEC) Review Committee, headed by Minister for Planning, Development and Special Initiatives Ahsan Iqbal.
According to sources, the Chinese company PMLTC has reported that the National Transmission and Dispatch Company (NTDC) or National Grid Company (NGC) is refusing to pay the Provincial Sales Tax on transmission service invoices issued by PMLTC, even though the tax became legally applicable in July 2023 and is contractually a pass-through cost under the Transmission Service Agreement (TSA).
Because of NGC’s refusal, a substantial unpaid Provincial Sales Tax liability — over Rs 22.8 billion, payable to the Punjab Revenue Authority and Sindh Revenue Board—has accumulated for PMLTC. Despite NEPRA’s determinations and provincial tax rules requiring NGC/CPPA-G to pass these charges through to DISCOs, the payments have not been made.
Chinese IPPs face Rs500bn in unpaid dues
The Chinese company maintains that the non-payment exposes it to penalties and default surcharges and has created a serious compliance and cash-flow crisis.
Sources added that PMLTC has also requested a correction in “Clause (12A) of Part-IV of the Second Schedule to the Income Tax Ordinance, 2001,” seeking a replacement of the word to with by, so that the clause reads: “(12A) the provision of Section 150 shall not apply to dividends paid by transmission line project under the Transmission Line Policy, 2015.”
Separately, sources noted that the Saindak (SiahDiq) Copper Mine project has been added to the CPEC project portfolio under the Joint Working Group (JWG) on Industrial Cooperation. The Petroleum Division has shared updated progress on the initiative.
On the establishment of the China–Pakistan Border Port Management Cooperation Committee, the Chinese Embassy—through the Ministry of Foreign Affairs (MoFA)—has shared a draft protocol and requested Pakistan to confirm its lead authorities for the Committee and provide feedback.
Regarding the provision of utilities to M/s Challenge Fashion, sources said the Minister for Planning convened a follow-up meeting on October 23, 2025, to review the slow progress. The Minister expressed serious concern over continued delays despite earlier directions, noting that the matter concerns a priority investment project and requires urgent resolution.
The Board of Investment (BoI) was directed to immediately submit a summary to the Federal Cabinet seeking approval for a general criterion for providing basic utilities to Special Economic Zones (SEZs). The proposed criteria may include minimum export commitments, employment generation, and technology transfer, to ensure facilitation of genuine investors and export-oriented enterprises.
Foreign Currency Pilot Project – Gwadar Free Zone: During the 83rd CPEC progress review meeting on October 8, 2025, the State Bank of Pakistan (SBP) was asked to issue a formal notification allowing 50% retention of export proceeds in the Gwadar Free Zone by September 23, 2025. For a long-term solution, the CPEC Secretariat and the Ministry of Planning were directed to notify a committee comprising representatives from the Ministry of Maritime Affairs (MoMA), Ministry of Finance, Ministry of Industries and Production, FBR, SBP, BoI, and GPA to evaluate and recommend legal amendments. The Committee has been notified under the convenership of MoMA; however, MoMA has proposed restructuring the Committee under the convenership of either the Ministry of Finance or the Ministry of Planning.
Copyright Business Recorder, 2025
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