Pakistan's Dasu Transmission Deal: Rs1.28 Billion (about $15.4M USD) Hidden in Bid Rules, Senate Demands Probe

The Senate Standing Committee on Economic Affairs has written to Pakistan's National Accountability Bureau and Federal Investigation Agency demanding an investigation into alleged large-scale irregularities in the 765kV Dasu-Islamabad Transmission Line Project (Lot-IV)^[1]. The core complaint is straightforward and mechanical: the bidding documents explicitly stated that taxes and duties would be excluded from bid evaluation, yet an amount of Rs1.282 billion (about $15.4M USD) in taxes and duties was incorporated into the price awarded to the winning bidder, M/s NWEPDI-TBEA (JV)^[1]. That maneuver allowed the winning contractor to appear cheaper than the second-lowest bidder, obscuring a financial loss to the national treasury^[1].

This is not a dispute over contract scope or performance; it is a violation of the bidding rules themselves. The mechanism is familiar to anyone who has watched transmission procurement: the bid specification creates one set of assumptions (taxes excluded), the evaluation follows those rules, and then the award incorporates costs that were supposed to be held constant. The result is that the comparison between bidders was not honest; the winning bid looked cheaper only because hidden costs were added after evaluation. The Senate committee also found that National Engineering Services Pakistan (Nespak), the public-sector engineering firm that evaluated the bids, submitted incorrect figures during the bidder evaluation process, and its managing director later admitted the error^[5]. Officials of the Power Division, the Board of Directors, and the National Grid Company were reported to be reluctant to rectify the irregularity^[1].

The broader financial damage extends beyond the Rs1.282 billion (about $15.4M USD) irregularity in Lot-IV. The Senate was informed that the national exchequer has suffered a total loss of $500 million due to large-scale irregularities in the Dasu project^[4], though the sources do not itemize how much of that loss stems from the tax-duty component versus other irregularities or project inefficiencies. A separate concern emerged in the Senate's inquiry: the contract in Lot-IV was awarded in 2015 based on a letter from the Engineering Development Board^[5], and the committee questioned how a project of this scale could be handed over based on that single document without more rigorous procurement oversight^[5]. The committee also raised concerns that the contract went to a company without sufficient experience in manufacturing and bundling conductors^[4].

For transmission procurement in any country, this sequence reveals the cost of weak competitive discipline. When the party evaluating bids has no incentive to catch rule violations, and the parties executing the project have no penalty for post-award cost additions, the winning bid can hide its true cost. In Pakistan's case, the Dasu project is a key infrastructure priority: a 765 kV double-circuit transmission line spanning approximately 250 kilometers, designed to transmit electricity from the Dasu Hydropower Plant to Islamabad, with grid stations at Mansehra and Islamabad West^[4]. The national grid needs that capacity; the question is whether it gets it at honest cost. The Senate's referral to the investigative agencies is the formal step; the substantive step is forcing procurement reform so the rule violation cannot happen again.

Pakistan's case is particularly instructive because the stakes are enormous. The nation's Indicative Generation Capacity Expansion Plan (IGCEP) 2025, 2035 envisions a substantial expansion of hydropower capacity to reduce dependence on imported fuels, with approximately 21,400 MW of additional hydropower capacity planned by 2035^[7]. Diamer Basha, Dasu, and Mohmand dams are of exceptional importance because of their combined contribution to electricity generation, water storage, and national food security^[7]. Every rupee lost to procurement irregularities in transmission projects that connect those dams is a rupee not spent on generation itself or on the grid upgrades the interconnection requires. Weak bid oversight in the name of project speed is false economy; it delays the broader transition by poisoning the procurement process that the transition depends on.