4,000 Jobs at Risk After NEA Cuts Power to Reliance Spinning Mills

The Nepal Electricity Authority (NEA) has cut off power supply to Reliance Spinning Mills, one of the country’s largest yarn producers, over unpaid “premium” fees for electricity consumed through dedicated feeders and trunk lines. The disconnection has brought production to a standstill and thrown the jobs of nearly 4,000 workers into uncertainty.

The NEA suspended supply to the mill on October 21, citing unpaid dues dating back to the load-shedding era. Since then, the company has relied on generators only for lighting, while full-scale operations remain halted, said Mahesh Pokharel, General Manager of Reliance Spinning Mills.

Before the shutdown, the factory produced around 125 metric tonnes of yarn daily, exporting goods worth Rs 11 billion annually and selling another Rs 3 billion domestically. Pokharel said the company had previously challenged NEA’s demand in court, arguing that the utility had issued payment claims without any billing records or consumption basis. The case was withdrawn after NEA’s board agreed to review the issue — but the disconnection came before any conclusion was reached.

“A factory is a national asset. The state must protect it,” Pokharel said. “Industries sustain livelihoods, generate taxes, and bear heavy bank investments. Instead of blanket disconnections, NEA should adopt a transparent mechanism to settle dues and keep factories running.”

The NEA recently disconnected power to 25 industries, alleging non-payment of “premium” charges for dedicated feeder and trunk lines used during the load-shedding years. The authority claims that these firms still owe arrears for uninterrupted supply.

Industrialists, however, argue that NEA has failed to present any verified record of consumption. “NEA’s arbitrary estimates and lack of measurement make these demands unscientific,” Pokharel said. “This has badly shaken the industrial climate.”

The shutdown has left thousands of workers idle. “This is not about one worker—it’s about 4,000 families,” said Madhav Chaudhary, President of the Sunsari chapter of the Nepal Trade Union Congress. “If the issue is not resolved soon, we will take to the streets.”

Industrialists have long sought a lasting settlement to the eight-year-old dispute over premium electricity fees. Nand Kishor Rathi, President of the Chamber of Industries Morang, urged the government and the private sector to initiate formal talks. “Cutting and reconnecting power repeatedly only fuels mistrust,” he said. “The government must adopt a flexible approach and resolve this issue once and for all.”

Rakesh Surana, Immediate Past President of the Chamber, said a fair distinction must be made between firms that actually used dedicated lines and those that did not. “Both sides have politicised the issue,” he said. “The problem has persisted because of ego on both sides. The only way forward is dialogue and compromise.”