Nepal | July 08, 2020

Electricity woes in Bhairahawa SEZ

Full-fledged operations unlikely for at least another one-and-a-half years

Sujan Dhungana
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Kathmandu, June 12

It may take at least a year-and-a-half before Bhairahawa Special Economic Zone is able to commence full-fledged operation, as the Nepal Electricity Authority is yet to supply the required electricity for the factories set up within the economic zone.

The current supply of three-phase line being provided by NEA to the country’s maiden SEZ is enough to carry out the construction work of the industries, but would be insufficient for the factories to operate. The Bhairahawa SEZ requires at least 10-megawatt dedicated power supply for the industries within the SEZ to operate, according to the officials of SEZ Authority.

“The NEA and Ministry of Energy have shown no urgency in increasing power supply to Bhairahawa SEZ,” alleged Chandika Bhatta, executive director of SEZ Authority of Nepal, adding they had sought a 15-megawatt dedicated line for Bhairahawa SEZ.

The SEZ Authority of Nepal had accepted the proposal of 22 domestic firms to set up industries within 69 plots of the Bhairahawa SEZ.

“While a number of domestic firms have already started the process of registering their industries within the Bhairahawa SEZ on Wednesday, they have expressed serious concerns about the lack of dedicated power line to the zone,” added Bhatta.

NEA sources, meanwhile, said the process of distributing adequate electricity for Bhairahawa SEZ has been delayed due to lack of transmission lines in Bhairahawa.

“We are supplying 33kVA electricity to Bhairahawa from Butwal-based substation of NEA and the line is already overloaded,” an NEA official said, requesting anonymity.

The NEA official said the NEA was trying to connect power to Bhairahawa SEZ through the Butwal-Bhairahawa 33kVA line, which was being planned, with assistance from the Asian Development Bank. However, even without any hiccups, the official said it would take at least a year-and-a-half to complete the project.

It has to be noted, though, that a number of industries are planning to begin the construction work of their factories within the Bhairahawa SEZ in the near future, with plans to complete the construction within a year. This means the factories would not be able to begin production for at least six months after being set up.

Prominent business houses like Golchha Organisation, Jagadamba Group, Vaidya’s Organisation, Lohiya Group and Siddhartha Group, among others, have taken approval to set up bottling plants and metal processing and industries to manufacture polymers, beverages, electric products and noodles, among others, within the Bhairahawa SEZ.

“The optimism and expectations of the private sector have largely been dashed time and again, and personally I see a lot of problems in Bhairahawa SEZ — the lack of adequate power supply is just one of the many issues,” said Shekhar Golchha, executive director of Golchha organisation and senior vice-president of Federation of Nepalese Chambers of Commerce and Industry, without elaborating.

“If industries set up within Bhairahawa are unable to begin operation after completing the construction work due to lack of sufficient electricity, it will set a bad example for local investors,” he warned.

The government is planning to establish at least one SEZ in each province and 14 across the country.

 


A version of this article appears in print on June 13, 2017 of The Himalayan Times.


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