Power shortages cripple industriesPower shortages cripple industries
Most of the industries across the country’s southern plains—Nepal’s industrial heartland—resumed operations after being shut for more than four months, but they are not being able to operate at full capacity due to crippling electricity crisis.
Although Nepal Electricity Authority (NEA) has decided to provide eight hours of power supply to industries located in Birgunj-Pathliya Industrial Corridor, the supply is irregular. “Even if there is electricity, voltage fluctuations have made it difficult to operate plants,” said Pradip Kedia, president of Birgunj Chamber of Commerce and Industry. “Diesel shortage has further worsened the situation.”
A single factory unit needs 3,000-5,000 litres of diesel daily to operate. There are around 1,000 factories along the industrial corridor.
As factories are not running at full capacity, industrialists are facing difficulties in repaying bank loans and paying salaries to their staffers.
They have demanded the government make a congenial environment to run factories. Recently, a group of industrialists and traders met government officials and political leaders in Kathmandu and informed them about the problems.
Traders, particularly from Birgunj—the epicentre of the Madesh agitation—have been the hardest hit. As the protestors have blocked the Burgunj customs point, the traders have been forced to reroute imported cargoes meant for the Birgunj-Pathliya industrial to other customs points.
Importers said they had to spend around Rs60,000 to Rs100,000 per truck to bring goods to Birgunj through other customs points. “Besides, the demurrage charges on consignments made from third countries has increased the freight costs sharply,” they said.
Ganesh Lath, former president of Birgunj Chamber of Commerce and Industry, said he paid nearly Rs1 million in demurrage charges for a 40-ft cargo container. However, importers are relieved to some extent after the government decided to address the issue of heavy demurrage charges. They said the demurrage charges have accumulated to Rs6 billion.
The business delegation also informed the Home Ministry about growing anarchy, such as rampant donation drive, in the area. “The government has not been able to provide security for industries and industrialists,” said a trader which did not want to be named.
Similar is the situation in Biratnagar. Purbanchal Lube Oil has remained shut for the last one and half months. The company’s chief Bhola Dulal says he has around Rs220 million to be recovered from dealers. “I am worried about how to recover the amount,” he said.
Although the factory resumed operation on December 16, it has hardly been able to operate due to the shortage of diesel to run power generators. “Even if we resume full-fledged operation, we cannot delivering the products to the market,” said Dulal.
After being hit hard by five-month-long Tarai banda and four-month-long Indian embargo, the Sunsari-Morang Industrial Corridor is now facing severe shortages of raw materials, besides the power crisis. The industries are struggling to repay bank loans due to the lack of cash flow. “Losses faced by the industries here have reached around Rs20 billion,” said Industry Association Morang President Shiva Shankar Agrawal.