Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Nepal Electricity Authority (NEA) has resumed efforts to collect long-standing arrears related to dedicated and trunk lines, amounting to NPR 6.6 billion. The authority has issued letters to industrialists, demanding payment within 15 days, including a 25% additional fine for delayed payments.
This directive follows instructions from Deputy Executive Director Manoj Silwal, who has mandated distribution centers to send notices to 61 industries that have not cleared their dues from 2072 BS to 2075 BS.
“We have already instructed the distribution center on June 23 to send letters to 61 industries that have not paid dues from 2072 BS to 2075 BS with an additional 25% fine,” Silwal stated.
The additional fine applies after a 60-day grace period for normal customers. Distribution centers have been instructed to apply this fine for overdue payments from 2072 BS to 2075 BS for electricity usage through dedicated and trunk lines.
The cabinet meeting on December 24, 2023, formed a three-member commission under the leadership of former Supreme Court judge Girish Chandra Lal to investigate the dedicated and trunk line arrears dispute.
The commission’s report, submitted to Energy, Water Resources, and Irrigation Minister Shakti Basnet on May 23, prompted the Prime Minister’s Office to direct the Ministry of Energy to implement the recommendations. Subsequently, the Ministry instructed the NEA to act on the decision of the Council of Ministers.
Following these directives, a seven-member committee, led by NEA director Ganesh Luitel, was established to determine the arrears owed by each industry.
Based on the committee’s findings, the 973rd meeting of the NEA board of directors on June 4 decided to impose an additional fee, including a 25% fine, for electricity used from dedicated and trunk lines from 2072 BS to 2075 BS. The NEA’s executive director then authorized distribution centers on June 9 to notify the industries accordingly.
The dispute traces back to the tariff determination commission’s failure to set tariffs from July to December 2072 BS, a matter still pending in court. Additionally, the NEA’s load-shedding schedules from 2075 BS to 2077 BS have been a point of contention. The Girish Chandra Lal commission’s report recommends recalculating the discounted tariff based on actual electricity supply periods during the load-shedding days.
Prime Minister Pushpa Kamal Dahal had instructed the NEA to collect the arrears, leading to power cuts in 24 industries starting December 6. While Himal Iron reconnected by paying the outstanding amount, other industrialists demanded the NEA provide TOD meter data before settling dues. The standoff prompted the formation of a high-level commission to resolve the issue, following demands from the Federation of Nepal Chamber of Commerce and Industry and the Confederation of Nepal Industry.
The three-member commission, including Sarita Duwadi, Secretary of Water Resources and Irrigation, and Dinesh Ghimire, Secretary of Commerce and Supply, was established on December 24. The NEA subsequently restored electricity to the affected industries following a board decision on December 27.
As the NEA moves forward with collecting these dues, the industrial sector faces increased pressure to settle longstanding financial obligations. The resolution of this dispute marks a significant step in addressing the financial challenges within Nepal’s energy sector.
How much is the arrears? (with additional 25% fine)
Jagdamba Steel: 1.60 billion Maruti Cement: 570 million Arghakhanchi Cement: 448.6 million Triveni Spinning Mills: 320 crores Lakshmi Steel: 237.9 million Jagdamba Synthetic: 205 million Butwal Cement: 184.5 million Ashok Steel: 175.8 million Dabur Nepal: 145.1 million Hulas Steel: 140 crores Himal Iron and Steel: 136.5 million Best Cement: 119.6 million Cosmos Cement: 90 million Everest Paper Mill: 90 million Hama Iron: 50 million Triveni Synthetic Yarn : 40 million Vishal Cement: 33.5 million Surya Nepal: 30 million Gharana Foods: 18.7 million Siddharth Pet Plast: 18.2 million SR Foods: 14.8 million Goenka Foods: 14.7 million Panchkanya Steel: 5.219 million Shyam Plastic: 4.9 million GB Textile: 3.582 million Bhalbari Rice Factory: 2.993 million Panchkanya Plastic: 2.463 million Everest Rolling Mill: 1.757 million SR Steel Industry: 1.624 million GB Textile (582): 1.411 million New Narayan Rubber Industry: 1.025 million Nepal Telecom: 1.024 million Yashoda Foods: 0.425 million Sona packaging: 0.355 million Sona Polymer: 0.346 million Shubalakshmi Polymers: 0.3 million New Nepal Plastic: 0.2 million Ag Health Industry: 76 thousand Jai Durga Plastic: 70 thousand National Rubber Industry: 59 thousand
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