Nepal faces substantial financial losses amid power cut to industries

Kathmandu: The Nepal Electricity Authority (NEA) disconnected power lines to various industries on December 19, causing a 22-day disruption in operations and leading to significant financial losses for the government and industrialists. The government formed an inquiry committee to investigate the tariff dispute, and on January 8, instructed the NEA to temporarily reconnect the power lines pending the committee’s recommendations.

During the power cut, the government incurred a loss of over Rs 3 billion in revenue, while industrialists reported losses exceeding Rs 12 billion. The affected industries, some of the country’s largest, engaged in export activities, and the losses covered revenue from customs and excise duties, income tax, and electricity tariffs.

The NEA is estimated to have lost Rs 234.4 million in electricity tariff during the 22-day power cut. Customs revenue was impacted, with an estimated loss of Rs 253.16 million after the NEA disconnected power lines to seven major steel plants. Other affected sectors include cement, mining, and spinning industries, each reporting substantial financial setbacks.

The government has formed an inquiry committee to address the tariff dispute, but the economic impact of the power cut is expected to have long-term consequences for both the government and industries involved.