Has the long-running dispute over dedicated and trunk power line premiums dragged on because some actors within the private sector tried to manipulate the process?
Raghunandan Maru, President of the Cement Manufacturers' Association of Nepal (CMAN), firmly rejects that claim. “No,” he says with quiet conviction. “There’s been a lot of speculation, but none of it is true.”
Since 2018 (2075 BS), the debate over premium dues for dedicated and trunk lines has remained unresolved. Some industry insiders have accused a few businessmen of taking matters into their own hands, promising to ‘settle’ the issue, only to prolong it further. Maru dismisses that too. “Those are all false allegations,” he says.
What is true, however, is that the Nepal Electricity Authority (NEA) has already cut off power to 25 factories for failing to pay the disputed premiums. These industries together employ between 20,000 and 22,000 workers. The shutdown not only threatens livelihoods of employees but also drains government revenue.
When asked whether the private sector tried to use political influence or bribe officials to resolve the dispute quietly, Maru is unequivocal: “Absolutely not. We don’t have that kind of power. We are industrialists, not power brokers. We focus purely on improving productivity, not on playing power games.”
He adds that industrialists are often unfairly portrayed as willful defaulters. “We are not willful defaulters. We’re ready to pay, provided we are given the actual data,” Maru insists. “The NEA should show us the consumption records: the units used, the time period, everything. We are ready to pay accordingly.”
The controversy over the ‘dedicated and trunk line premium’ is technical in nature, but it has become politically entangled. Many agree that the state apparatus in Nepal is prone to exploitation, but recently, a different trend has emerged, middlemen running to Baluwatar – the Prime Minister’s residence – claiming they can ‘fix’ private sector problems in exchange for commissions.
Even so, Nepal’s private sector has never been weak. During the decade-long Maoist conflict, when bombs could go off anywhere, the industrialists took enormous risks and invested. If they could survive that, they can certainly endure this. But prolonged dispute has created the false narration of the private sector, as ‘they are fraud’.
Thus, the environment today feels increasingly uncertain. The 2015 constitution of the Democratic Republic of Nepal brought political stability in the country, but the private sector still is facing unpredictability due to government’s policy inconsistency and vision-lessness.
The economic implications of NEA’s decision to cut power to 25 major cement factories are severe. The NEA itself reportedly loses around 50 to 60 million rupees a day in revenue from halted industrial consumption. The government also loses tax income, workers lose jobs, and investor confidence continues to erode.
“All the industries have been paying their regular electricity bills on time,” Maru explains. “In fact, most even take advantage of the 2% rebate offered for prompt payment. So the problem isn’t about non-payment of regular bills, it’s solely about the premium charge during the load-shedding period, which has become a dispute over the time.
That premium dates back to the days of rolling blackouts, when some factories paid extra for uninterrupted power, what was known as ‘dedicated’ or ‘trunk’ line supply. “Some industries signed agreements with NEA, some didn’t, and asked for uninterrupted power,” Maru recalls.
Then where is the confusion?
The issue surfaced in 2018 when, three years after, NEA sent letters demanding payment for the old premium charges. “They sent us a notice – just a letter, not even an official bill – asking for millions in back payments. Naturally, that created confusion.”
Maru draws a simple analogy: “Imagine you dined at a restaurant three years ago, and suddenly they send you a bill now. Wouldn’t you ask for proof first, what meal, what date, how much? That’s all we’re asking for: the data. Give us the data, and we’ll pay.”
According to him, NEA has all the necessary time-of-day (ToD) meter data that can verify, who actually used uninterrupted power. “We’re ready to pay based on that data,” he insists.
A commission led by a former Supreme Court justice, known as the Lal Commission, was formed during Prime Minister Pushpa Kamal Dahal’s tenure to review the case. “The commission spent months collecting data and ultimately recommended that NEA recover payments based on evidence,” Maru adds.
“NEA then called us for a review, and every industry showed up,” he says, adding, “But instead of acting on the commission’s findings, the NEA dismissed the review altogether. If the review had concluded that we must pay, we would have gone to court to respect the due process.”
Maru believes NEA effectively ‘closed the door’ to resolution, forcing the dispute to linger.
Nepal’s cement sector has already absorbed investments worth over Rs 300 billion. Yet, due to market saturation and policy instability, most plants are operating far below capacity. “The ongoing dispute,” he warns, has further demoralized investors.
There is rumour that ‘middlemen’ have also entered this mess under the pretext of helping settle it. “But we’ve never taken this issue to the government through such people. If there’s real evidence we owe money, we’ll pay, gladly,” Maru reiterates.
Nepal currently has more than 60 registered cement factories, including around 30 large integrated plants. Together they have an annual capacity of over 25 million tons but national consumption is less than half that.
“So whether you’re a large factory or a small one, the problem is the same,” Maru notes. Some companies have even sought legal remedies; a few have secured stay orders from the courts and continue operating. “So, the legal route remains open,” he says adding that the industries just don’t want to escalate unnecessarily.
When asked what is their next step, Maru admits that industrialists are divided. “Some of our colleagues are saying maybe we should handover the keys of the industries to the government,” he says, adding that the proposal is under discussion only at this stage. “We’re still discussing it.”
But Maru is deeply concerned about the impact on the country’s industrial morale. “The longer this drags on, the worse the business climate becomes. Investor confidence is already shaken.”
Even the next generation of industrialists, he laments, is losing interest. “Our families have been in this business for six generations. But the younger ones look at all these complications and say, ‘Why would we continue in Nepal?’ That’s heartbreaking.”
Ultimately the dispute cannot go unresolved forever
“Doing business in Nepal is already a huge challenge. So, I urge the concerned authorities – be it the Prime Minister, the Energy Ministry, or the Supreme Court – to intervene and make a fair decision.”
“A just decision,” he concludes, “whether it comes from the NEA, the ministry, or the judiciary, is all we’re asking for.”
So, is this dispute moving toward a resolution or becoming even more complicated? On this issue, Nepal Cement Manufacturers’ Association President Raghunandan Maru spoke in a video interview with Nepalkhabar on Tuesday under the segment ‘Tattkalai'.
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