Industries operating within Nepal’s industrial estates have started clearing long-overdue infrastructure fees after the government issued a warning that legal measures would be taken against defaulters.
According to Industrial District Management Limited (IDML), industries have already paid more than Rs 10 million following a recent notice requiring outstanding payments to be settled within seven days.
More Than Rs 880 Million Still Outstanding
Despite the recent collections, more than 300 industries across 10 industrial estates still owe over Rs 880 million.
IDML Information Officer Basudev Sodari said the latest notice prompted many industrialists to initiate payments and hold discussions with the authorities.
Minister for Industry Gauri Kumari has directed officials to expedite the recovery process.
Balaju Industrial Estate Has Highest Arrears
Outstanding dues by industrial estate are as follows:
- Balaju Industrial Estate – Rs 438.9 million;
- Hetauda Industrial Estate – Rs 209 million;
- Patan Industrial Estate – Rs 101 million;
- Butwal Industrial Estate – Rs 45.7 million;
- Pokhara Industrial Estate – Rs 44.1 million;
- Bhaktapur Industrial Estate – Rs 17.1 million;
- Nepalgunj Industrial Estate – Rs 13.4 million;
- Dharan Industrial Estate – Rs 7.1 million;
- Gajendranarayan Singh Industrial Estate – Rs 6.3 million; and
- Birendranagar Industrial Estate – Rs 600,000.
Infrastructure Development Affected
Officials said the inability to collect dues has adversely affected infrastructure construction, maintenance and service delivery within industrial estates.
Industries are required to pay charges for:
- Land use;
- Building rentals;
- Electricity services; and
- Water supply.
However, many enterprises had ignored repeated notices over the years.
Following the government’s latest warning, smaller arrears have begun to be cleared, while negotiations are ongoing for larger outstanding amounts. Some industrialists have requested concessions and proposed treating disputed payments as deposits rather than penalties.
Dispute Originated From 2018 Rent Hike
The issue dates back to 2018, when the Industrial District Management Board increased rental rates. Industrialists opposed the move, arguing that the hike was excessive.
Although the Ministry of Industry temporarily suspended the decision, the Board reinstated the revised rates in 2022 and sought to apply them retrospectively from August 2018.
The dispute prompted the Federation of Nepal Industrial Estate Industries to file a case in the Patan High Court. After the court ruled in favor of IDML, the matter reached the Supreme Court.
Supreme Court Ruling and Review Petition
On March 25, 2025, the Supreme Court upheld the revised rental rates but ruled that the new fees should only be applicable from July 7, 2022—the date on which bills were formally issued.
The court also ordered that industrial estate fees be reviewed every five years.
In January 2026, the Board sought a review of the verdict, arguing that implementation of the ruling would result in revenue losses of Rs 150–160 million. The hearing is scheduled for June 27, 2026.
Meanwhile, the Federation of Nepal Industrial Estate Industries has urged both parties to withdraw review petitions and implement the Supreme Court’s decision to create a more stable and investment-friendly industrial environment.
According to Basudev Sodari, industries have been asked to deposit disputed rental amounts as security until the matter is fully resolved, given the large financial resources required for the expansion and modernization of industrial estate infrastructure.
