Following Nepal Electricity Authority’s (NEA) decision to disconnect electricity supply to the industries for unpaid dues of electricity used through dedicated feeder and trunk lines, production of 32 industries has reportedly come to a standstill. Citing the unpaid dues despite repeated reminders, the NEA cut off power supply to 34 industries on Thursday night, arguing that industries had benefited from 24-hour electricity during the severe load-shedding period between January 2016 and April 2018.
One of the impacted companies, Arghakhanchi Cement, is reportedly losing more than Rs 20 million daily, according to its director, Pashupati Murarka. Arghakhanchi Cement has a daily production capacity of 3,000 tons of cement.
“With the halt in production, daily-wage workers are now jobless, leaving their household stoves unlit and halting government revenue from the industry,” Murarka stated. “The NEA and government’s actions appear aimed at driving industrialists out of the market, sending a negative message.”
The NEA’s executive director, Kulman Ghising, issued the disconnection order despite opposition from the board chairman and Energy Minister Dipak Khadka, who chaired a meeting of the NEA’s board of directors on Thursday morning.
On Thursday afternoon, Ghising met with industrialists and offered to extend the installment payment period from 28 to 60 months if they wished to pay their dues in installments. However, the industrialists rejected the proposal.
The NEA reported that it exercised its authority under the 1985 Electricity Act and 2021 Tariff Collection Regulations to disconnect power to those who failed to pay dues within 60 days of meter reading, a timeframe after which disconnection can occur without prior notice.
Raghunandan Maru, president of the Nepal Cement Producers Association, also noted that the industry shutdown was resulting in a daily economic loss of billions of rupees to the state. “Thirty-two industries have completely halted production due to the power cut, creating shortages and potential price hikes,” Maru added.
The NEA claims to have outstanding dues amounting to around Rs 8 billion, while the daily losses incurred by industries due to the shutdown exceed this amount. Maru pointed out that although the immediate impact may not be apparent, the long-term costs to the state would be severe, projecting a negative image of Nepal’s industrial environment internationally.
On Thursday, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) issued a statement expressing concern over the recurring power disconnections, which it argued hurt production and discouraged investment. FNCCI called for an immediate restoration of power to enable negotiations and find a resolution.
The FNCCI also highlighted that a commission headed by former Supreme Court Justice Girish Chandra Lal had been formed to resolve the dispute, yet its report remains unimplemented.
The industrialists maintain that they cannot clear the dues without reliable proof from the NEA of their dedicated feeder and trunk line usage. NEA spokesperson Chandan Kumar Ghosh emphasized that the NEA’s intent was to recover dues, not disrupt production. The NEA was forced to disconnect the lines, he claimed, after repeated warnings went unheeded.
Two Industries Reconnected After Initial Payment
On Friday, two of the disconnected industries made their first installment payments and were reconnected with electricity supply. According to the NEA, GB Textile-1 and GB Textile-2, both under the Butwal Distribution Center, paid Rs 3.57 million and Rs 1.41 million, respectively, leading to their reconnection.
Some other industries reportedly intended to make payments in installments but refrained out of solidarity with the broader industrial community, Ghosh explained.
Among the 49 industries with pending dues, six industries, including Rolpa Cement, Samrat Cement, Shubhashree Agni Cement, National Rubber Industries, Narayan Rubber Industry, and AG Health Industries, have made their first installment payments.
According to the NEA, state-owned Hetauda and Udayapur Cement Industries are currently in discussions about installment payments, and hence, their lines have not been disconnected. Similarly, seven industries, including Shivam Raghupati Jute Mills, Reliance Spinning Mills, Arihant Multi Fibre, Arihant Polypack, and Maruti Cement, have acquired interim court orders preventing their disconnection.
