FBR seeks details of expenditures, taxes from HESCO

The company was earlier given the deadline of May 22 to submit required details and documents

HYDERABAD: Hyderabad Electric Supply Company (HESCO) spent more than Rs7.6 billion on grid stations and transmission lines during two financial years. However, the company failed to submit details of these expenditures, tax deductions and remittances, as asked by the Federal Board of Revenue (FBR), twice last month.

"You were required to produce details and documents pertaining to payments made in respect of schemes for grid stations and transmission lines, which were completed under World Bank, Asian Development Bank (ADB) and Public Sector Development Programme (PSDP)," a letter written to the chief executive officer of HESCO by deputy commissioner Inland Revenue Ram Chand reads.

The company was earlier given the deadline of May 22 to submit the required details and documents, however, it was extended to May 30 during the second correspondence. According to official sources, HESCO has still not furnished the documents.

"Regrettably, no compliance was made by you despite the fact that the referred notices were validly served upon you," the letter reads.
The FBR has sought details of payments, tax deductions and evidence of remittances of tax under Rule 44 of Income Tax Rules, 2002, from HESCO. The company's spokesman Sadiq Kubar told The Express Tribune that he is unaware of the correspondence between the two organisations. He sought time to get the information.

The development projects are executed under Project Management Unit (PMU) of HESCO which was formed in 2009. The acting HESCO CEO Abdul Haq Memon is currently the chief engineer of the PMU and in that capacity he is supposed to provide details to the FBR.

In 2015, HESCO received a loan of Rs80 million from the World Bank and another loan Rs989.6 million loan from ADB for grid stations. Under the PSDP, the company was given Rs335.835 million for grid stations and Rs267.83 million for transmission lines in the same year.

The ADB lent to HESCO Rs2.154 billion for grid stations and Rs1.898 billion loan for transmission lines in 2016, while the World Bank's credit in the same year stood at Rs28 million. The company was given Rs1.51 billion for grid stations and Rs457.67 million for the transmission lines, under PSDP, in 2016.

The HESCO powers 13 districts of Hyderabad, Nawabshah and Mirpurkhas divisions. But the recurrent complaints about technical faults across the company's jurisdiction reflect the poor performance of its grid stations and transmission system.

In the outgoing month of Ramazan, though the federal government had announced a reduction in the hours of the load shedding, complaints pertaining to prolonged outages were widely reported from the urban and rural areas powered by HESCO.