NEA cuts power to 32 industries over unpaid dues, halting production

Kathmandu, October 27 — The Nepal Electricity Authority (NEA) has cut power lines to 32 industries that failed to pay dues for dedicated and trunk line services, resulting in a complete halt of production across all affected industries.

Before disconnecting the power, the NEA had given industries a 90-day deadline to settle their bills. Among the 49 industries that did not pay, two are public institutions. The NEA has stated that it can reconcile accounts with Udaypur Cement Industry and Hetauda Cement Industry Limited, which together owe approximately 780 million Nepali Rupees.

Four industries have committed to pay their dues in installments, with one of them already having made the first payment. Two industries have settled their entire outstanding amounts, while two others agreed on Sunday to make installment payments and have settled some dues.

Seven industries have sought interim orders from the court against the decision to cut their power lines. As a result, the NEA has not restored power to the 32 affected industries. Those industries that have paid their dues are currently having their power restored.

Most of the disconnected industries are related to cement and steel production, which coincides with a peak construction period. With the end of the monsoon, infrastructure projects and private sector construction work are expected to resume. However, industry leaders have reported that the NEA's disconnection has brought production to a standstill for nearly all affected industries.

Pashupati Murarka, president of Arghakhanchi Cement, stated that cutting power during a time of increased market demand has created significant problems for industries. He said, “Tax is a disputed issue. We’ve been saying we’ll pay if there’s proof, but the unilateral decision by the NEA without resolving the dispute has caused us problems.” He noted that industries operating at one-third capacity cannot produce without power and mentioned that Arghakhanchi Cement is suffering daily losses of around 20 million Nepali Rupees.

According to the NEA, Arghakhanchi Cement needs to pay 448.3 million Nepali Rupees.

Raghunandan Maru, president of the Nepal Cement Producers Association, also stated that the closure of industries due to disconnections is causing significant economic losses for both entrepreneurs and the state. He said, “To my knowledge, production is completely halted for 32 industries. This benefits no one.” He believes the impact will be both short-term and long-term, leading to material shortages and price increases. Additionally, the message of a poor industrial environment reaching the global market could have long-lasting effects on the country.

The Federation of Nepalese Chamber of Commerce and Industry (FNCCI) has issued a statement expressing concern that repeated power cuts due to disputes are affecting production and creating an unfavorable investment environment. FNCCI has urged for a resolution through dialogue and immediate reconnection of power lines.

However, the NEA has made it clear that no power will be restored to industries until the dues are paid. The NEA stated that power lines would only be reconnected once the cabinet decides not to cut the lines after verifying the outstanding dues.