A high-level meeting led by Prime Minister Sushila Karki on Monday produced a ‘middle-ground’ proposal to resolve the long-standing dispute over dedicated feeder and trunk line fees. However, several industrialists whose power had been cut off, have criticised the deal, accusing Chandra Dhakal, the president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), of negotiating with the government without consulting the affected firms.

The previous government had also disrupted electricity supplies to several factories multiple times after a prolonged tussle between the Nepal Electricity Authority (NEA) and industrialists over the outstanding dues. The issue was settled at that time after intervention from then-energy minister Deepak Khadka and then-prime minister KP Sharma Oli. Then managing director of the NEA, Kulman Ghising, had continuously pressured the utility to stop power supply to the companies for their refusal to pay dues for several years.

Soon after assuming office as energy minister of the interim government, which was formed after the September 8–9 anti-corruption Gen Z movement, Ghising decided to recover long-pending payments owed by various industrial firms. As the public utility’s line minister, his first directive to the NEA was: recover the dues.

The factories and businesses argued that the NEA’s billing and evidence systems were flawed, insisting that liability should only be determined based on the findings of the Lal Commission and verified TOD (Time of Day) meter data showing whether factories operated during load-shedding periods as claimed by the NEA.

When tensions flared between the NEA and industrialists, Prime Minister Sushila Karki discussed the issue with FNCCI President Dhakal on Sunday and Monday.

An official from the Prime Minister’s Office said that the meeting on Sunday was initiated by the FNCCI and that the next meeting was called by the prime minister on Monday.

In a statement issued after the discussion, the FNCCI said an agreement had been reached with the government to adopt a middle-ground approach regarding the outstanding dues.

“A middle-ground proposal has emerged regarding the dispute over fees for dedicated feeders and trunk lines during a high-level discussion involving Prime Minister Sushila Karki, senior government officials, and the President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Chandra Prasad Dhakal,” reads the statement of FNCCI.

Monday’s meeting held at the Prime Minister’s Office was attended by Finance Minister Rameshore Khanal, Energy Minister Kulman Ghising, Industry and Commerce Minister Anil Sinha, Chief Secretary Eknarayan Aryal, several secretaries, and FNCCI President Dhakal.

FNCCI said the discussion proposed a compromise deal.

“The industrialists will have their disconnected electricity lines reconnected immediately after they deposit an amount equivalent to one instalment out of the 28 instalments previously set by the Nepal Electricity Authority (NEA),” the statement of FNCCI says. “This amount will not be considered an installment payment but rather a security deposit under dispute. After submitting the deposit, industrialists will be able to seek a review and pursue other legal remedies.”

The Prime Minister’s Office said that although the industrialists had set certain conditions for payment of outstanding dues, the government did not accept them. However, in the end, the government indicated that it might be flexible in extending the instalment period.

The government has allowed dues to be paid in 28 installments, and electricity supply will be restored, once the first instalment is paid. Industrialists who feel victimised will also be able to submit their applications along with the first instalment.

Despite the FNCCI claiming the meeting with the prime minister and authorities were positive, affected industrialists have accused FNCCI President Dhakal of acting unilaterally.

“We heard that Prime Minister Karki had called FNCCI President Dhakal for dialogue on Sunday and Monday, but we are not aware of other discussions," said Lekhanath Aryal, the company secretary of Shivam Cement, one of the factories involved in the dispute.

“Dhakal, who is not aware of the actual problems of the industrialists, was in dialogue with Prime Minister Karki without any representative of affected industries,” Aryal added. “We learned from the media that Dhakal has reached an agreement with the government, but we have not been communicated about it.”

A representative from Reliance Spinning Mills made a similar claim. The representative, requesting anonymity, said the FNCCI had reached what it called a ‘middle-ground’ agreement with the government without consulting them, and that they would not accept it.

The Post’s attempts to speak to Dhakal for clarification were unsuccessful, and two FNCCI vice-presidents said they had no information about the matter.

“President Dhakal unilaterally made an agreement with the government, none of the board members of FNCCI were involved,” said a vice-president.

Meanwhile, Krishna Prasad Sharma, president of the FNCCI’s Lumbini province chapter, said that the government’s decision to allow industrialists to file appeals could be seen as a positive aspect of the agreement.

In the dispute, four industrial firms—Panchakanya Plastic Industry, Panchakanya Steel Industries, Siddhartha Petplastic, and Shyam Plastic—all operating in the Butwal-Bhairahawa area, paid the first instalment of their outstanding dues to the NEA on Monday. Their power supply had been interrupted on October 24.

Earlier, on October 21, the NEA had cut power to six industrial firms in the first phase for failing to clear their dues.

Power to Jagdamba Steel, Reliance Spinning Mills, Shivam Cement, Ghorahi Cement, Arghakhanchi Cement, and Triveni Spinning Mills were cut in the first phase.

The NEA had issued a 21-day ultimatum, later extended to a 28-day instalment plan, assuring that partial payment of the first instalment would prevent disconnection. After many firms ignored the notice and the deadline, the NEA cut power.

According to the NEA, most industrial firms affected in the second phase are located in the Butwal-Bhairahawa Industrial Corridor and include Panchakanya Steel, Panchakanya Plastic, Everest Rolling, SR Steel, SR Food, Bhalbari Automatic Rice Mill, Gharana Foods, Goyenka Foods, Siddhartha Pet Plastic, and Shyam Plastic Industry, among others.

Between mid-2016 and early 2018, the industrial firms accumulated about Rs5.5 billion in unpaid premium charges for using these lines. Disputes over how to recover this amount have persisted for years between the government, the NEA, and industrial groups.