April 1: Just when the cement and rod industries finally started gaining momentum after a long gap due to Covid-19, they are again facing crisis because of loadshedding. The cement and rod industries say that they are compelled to lower the production in the main season when there is high demand.

Generally, Nepal imports electricity from India in winter. But this time, there is a shortage of electricity in the Indian market itself. Due to the shortage of coal, the production of electricity has declined and prices have skyrocketed in India. At present, the NEA cannot purchase electricity at previous rates, and therefore it has been submitting proposals to buy electricity at an increased rate. Despite this, the supply of electricity to the industries is not enough to meet the demands.

President of the Confederation of Nepalese Industries (CNI) Vishnu Agrawal said that the industries are not getting regular supply of electricity. He says that NEA should ensure regular supply of quality electricity regardless of the fluctuation of rate.

 “The problem in power supply might discourage both domestic as well as foreign investors. The cost of production has gone up. The government and Nepal Electricity Authority should be responsible to resolve it,” said Agrawal.

Similarly, Tara Prasad Pokhrel, vice-president of Cement Manufacturers' Association of Nepal, said that the industries are facing 12-13 hours of load shedding. Pokhrel said, “On the one hand, there is load shedding and on the other hand, the industry which needs 6 MW of electricity is getting only 3 MW. The industries are on the verge of closure due to non-availability of electricity.” He also said that as the production and sales cycle deteriorates due to non-availability of electricity, bank interest increases and causes liquidity crisis.

He said that there has been no regularity in power supply for the last two years. “Production had already started to take place after Covid-19 slump. The issues with energy are arising again when development work has already started to pick up pace,” said Pokhrel. He said that the electricity goes to waste during the rainy season and industries reach the verge of closure due to scarcity of electricity during the winter.

Pokhrel, who is also the managing director of Agni Cement, said that cement producers have reduced production by 50 percent due to lack of electricity. Although the charge of electricity is constant, industrialists are not able to get electricity. Pokhrel suggested that the government to build reservoir-based projects to solve such problems in the long run.

Hari Neupane, chairman of Ambe Group said the power cuts at the rolling mills caused a lot of problems. Stating that industries are not getting regular electricity for some time now, he said that the factories have cut production by 50 percent. “There is no power. Even if we get electricity supply, it is not regular. Cement and rod industries are in a tight spot due to this reason. The demand cannot be reciprocated with the supply.” He said that they are unable to meet the high demand of the market since the production is low.

The Nepal Electricity Authority (NEA) claims that the electricity supply to the industries as per the demand is halted only when it does not get the electricity at the proposed rate. NEA spokesperson Suresh Bahadur Bhattarai said that electricity is not provided only when the bid is rejected. Bhattarai said, “There is no load shedding situation as the industrialists said. We provided electricity regularly on Wednesday as well.”

The recent conflict between Russia and Ukraine pushed up the prices of industrial raw materials in the international market. As the price of coal went up, there has been a problem in the supply of electricity to Nepal from India. Now the price of cement and rod has also gone up. The association informed that the prices of OPC and PPC cement have gone up by Rs 30 per sack.

As informed by Pokhrel, at present, the price of OPC cement has reached Rs 640 per sack and PPC cement Rs 540 per sack on average. He said that the price of cement has been affected due to the increase in the price of diesel even when the electricity charge was not increased. Meanwhile, the price of iron rods has gone up significantly as well. The price of rods, which was around 70/75 per kg, has now reached Rs 130 per kg.