Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Hetauda Cement Industry, a key government-run enterprise in Nepal, has remained non-operational for nearly five months, citing coal shortages, equipment repairs, and power outages. The plant, which ceased operations on October 1, now faces an empty stockpile for the past two weeks. Similarly, Udayapur Cement Industry, another government-owned entity, has been grappling with similar challenges, operating sporadically since the Dashain festival.
The primary reason for these shutdowns is the acute shortage of coal. Market interventions intended by these two government-run cement plants seem to have backfired, leaving them in a near-comatose state. Meanwhile, private cement producers have taken advantage of the situation by forming cartels and syndicates to hike prices unchecked.
In the past six months, the price of cement per sack has doubled, soaring from NPR 400 to NPR 815, according to the Department of Commerce, Supplies, and Consumer Protection. Reports suggest plans to push prices further to NPR 1,000 per sack, while the government remains largely inactive.
Consumers and Builders Protest Against Price Hikes
The Nepal Construction Entrepreneurs Federation has raised objections to the rapid price hikes, accusing private producers of exploiting the market through black marketing and cartels. The federation has warned of potential protests if price controls are not implemented. “The price has increased by NPR 200 per sack within a month, which is unacceptable,” read a statement from the federation, urging the government to intervene immediately.
Consumer advocacy groups have also criticized the government for its failure to monitor the market. “The government’s silence amid such blatant price manipulation by private cement producers is alarming,” said Madhav Timilsina, president of the Consumer Rights Research Forum. “Immediate action is needed, either by restarting government-owned plants or penalizing black market activities.”
Financial Troubles Plague Government Cement Plants
Hetauda Cement’s operations have been stalled due to a lack of coal, outdated machinery, and insufficient budgets. “We submitted plans to the ministry multiple times, but there has been no response,” said Hetauda Cement’s spokesperson Hareram Acharya. The factory, which hasn’t paid its electricity bills for months, owes NPR 400 million to the Nepal Electricity Authority.
Similarly, Udayapur Cement Industry has been struggling with coal shortages and financial constraints. Acting General Manager Mahesh Sah revealed that the plant received only NPR 160 million of the NPR 400 million requested for maintenance, leaving no funds for raw material procurement. “Employees have not received salaries for four months, and the plant cannot operate under these circumstances,” Sah noted.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
