The interim government on Tuesday started cutting off electricity supply to industries as they have refused to pay billions of rupees for using dedicated and trunk lines, dues that have been pending for years.

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

Soon after assuming office as Minister for Energy, Water Resources, and Irrigation on September 15, Ghising decided to recover the long-pending payments owed by various industrial firms. As the public utility’s line minister, his first directive to the NEA was: clear the payments.

The differences between then minister Khadka and Ghising over the issue had escalated into a major dispute. Then the Oli administration dismissed Ghising from his position as head of the NEA.

The NEA has now again piled pressure on the companies refusing to pay the dues, disconnecting power supply to a number of industries.

In the first phase, the NEA disconnected power supply to six industries from October 21. According to NEA spokesman Rajan Dhakal, it extended the action by cutting off electricity supply to an additional 18 industries on Friday.

According to the NEA, most of the industries 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, industries 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.

After returning to government as energy minister amid the political upheaval following the Gen Z movement on September 8 and 9, Ghising made the recovery of unpaid electricity bills one of his foremost priorities. Upon assuming office, he transferred former managing director Hitendra Dev Shakya and appointed Manoj Silwal, reportedly his close confidant within NEA, as the chief of the utility. The Oli government had appointed Shakya to replace Ghising.

Ghising has urged industrialists to cooperate, citing that the government was under tremendous financial pressure, and not to make any excuses to delay payments.

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

“It’s not that we don’t understand the fact that industries are the backbone of the country’s economy,” said NEA spokesman Dhakal. “But when it comes to enforcement of the rules, we must treat the general public and industrialists by the same standard.”

If the supply to ordinary consumers is disconnected within 60 days after failing to pay their bills, how can it be acceptable for industrialists to go years without settling their dues, he asked.

“We had already issued a 21-day notice. The supplies of the industries that did not come in contact with or respond to NEA were cut in the first phase,” said Dhakal.

According to him, 14 industries have paid their first installment so far, but 25 others still owe Rs5.48 billion. Jagdamba Steel alone owes Rs1.6 billion, Reliance Spinning Mills Rs753.7 million, Shivam Cement Rs778.8 million, Ghorahi Cement Rs508.5 million, Arghakhanchi Cement Rs448.4 million, and Triveni Spinning Mills Rs321 million, totalling Rs4.29 billion. The NEA disconnected electricity supply to these companies in the first phase.

The industrialists have since issued a statement expressing serious objection to the government move, uniting under the group Federation of Victimised and Harassed Industries (Nepal).

They have announced they would not pay the disputed charges, claiming that their stance was based on the rule of law and economic stability, not on an attempt to evade legitimate fees.

The industries 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 proving whether factories operated during load-shedding periods as claimed by the NEA.

“NEA’s move is unjust and harmful to both businesses and employment,” said Kul Prasad Neupane, vice president associate of Federation of Nepalese Chamber, Commerce and Industries (FNCCI), Lumbini chapter.

Neupane accused the authorities of acting unilaterally instead of engaging in dialogue with industry representatives.

The government’s recent move is seen as more likely to worsen, rather than improve, the business environment that has deteriorated since the Gen Z movement, he said.

“Most of the industries whose power lines have been cut so far are located in Lumbini Province, where thousands of workers are employed,” Neupane said. “The shutdowns risk triggering significant job losses and further destabilising the local economy.”

Critics accuse the minister of not focusing on restoring a stable business environment. Minister Ghising, they say, has been driven by a desire to settle old scores.

Ghising’s earlier decision to transfer the then NEA managing director, Shakya, has also drawn opposition. In March, the previous government had dismissed Ghising from his post and appointed Shakya as his replacement.

While Prime Minister Sushila Karki and Finance Minister Rameshore Khanal are urging businessmen not to panic and continue their business, assuring security to them, the other ministry of the same government is terrorising the business community, which highlights the government’s double standard, critics say.

Meanwhile, Prime Minister Karki has expressed concern after reports emerged that the Hyatt Regency Hotel had halted its operation. Following her inquiry, Finance Minister Khanal spoke with the hotel’s management on Saturday morning.

“The interim government, which was formed with the mandate of holding free and fair elections on March 5, is deviating to other issues, which at the moment do not look rational,” said economist Govinda Nepal. “The main responsibility of the government should be to boost the morale of the business community after vandalism and arson in businesses during the Gen Z movement.”

In such a volatile situation where protests may flare up anytime, the government’s efforts should be to engage the people in businesses rather than closing the industries, which will make the people idle, Nepal argued.