Top political leaders including Speaker of the House of Representatives (HoR), Agni Prasad Sapkota, have expressed their views that the Millennium Challenge Corporation (MCC) has to be approved by forging a national consensus.
However, HoR Speaker has yet to put MCC on the agenda, Spokesperson and Joint Secretary at Federal Parliament Secretariat Rojnath Pandey told NepalNews. He said that it is up to the government when to include MCC in the agenda of the parliament session.
Meanwhile, the US officials have expressed confidence that the MCC Compact with Nepal would be ratified by the HoR at the earliest which would help strengthen Nepal-US cooperation and collaboration subsisting for 73 years.
MCC Vice President, Fatema Sumar, during her four-day stay in Nepal, held separate meetings with Prime Minister and Nepali Congress President Sher Bahadur Deuba, CPN (Maoist Centre) Chairman Pushpa Kamal Dahal, CPN (Unified Socialist) Chairperson Madhav Kumar Nepal, CPN UML Chairperson KP Sharma Oli, former prime minister Baburam Bhattarai, Finance Minister Janardhan Sharma, Minister for Energy, Hydro Resources and Irrigation Pampha Bhushal among others and appealed to them to ratify the MCC Compact soon from the parliament.
She made it clear that as per MCC Compact Nepal would get Rs 55 billion grants by the US government for constructing transmission lines and roads which was not the part of Indo-Pacific Strategy of the US. She hoped that the MCC Compact would be endorsed by the HoR soon with political consensus.
She had said that the project under the MCC Compact would contribute to the restoration of the economy and employment generation. Sumar said that the US had not set any artificial deadline for the parliamentary ratification of the MCC compact in Nepal, but there was no reason for delaying the ratification which should have happened two years ago.
She said although the MCC compact was finalised before the onset of the COVID pandemic, the project could be an added advantage to revive Nepal's economy and better the lives of poor people. She wondered why Nepal should wait to create jobs, provide electricity at homes, build safe roads, and lower costs of business.
Sumar said eight governments in Nepal in the past 10 years had sought the MCC compact and as a result of multiple rounds of negotiations, the project was signed in 2017.
For the protests launched mainly by the communist parties of Nepal against the MCC agreement, Sumar opined that it was for the people of Nepal to ask political parties why the protests were happening and where they were coming from.
Sumar, who had arrived in Kathmandu on September 9, during meetings with political leaders, discussed the required steps to implement the $500 million MCC-Nepal infrastructure programme and answered questions posed by Nepal's Ministry of Finance.
Sumar affirmed that the MCC grant programme had no military component and that it would not impede Nepal's sovereignty, and Nepal's constitution would prevail over the agreement. Prior to negotiating and signing the compact in 2017, the Government of Nepal had designed the five-year grant programme to provide more reliable electricity and lower power and transportation costs for all Nepalis.
Nepal sealed a deal with the Millennium Challenge Corporation (MCC) on September 14, 2021, to mobilise a $500 million grant for the development of the energy and road transport sector. The sectors are considered the major constraints for the economic growth of the country.
Minister for Law and Federal Affairs Gyanendra Bahadur Karki, then Finance Minister, and Jonathan Nash, acting chief executive officer of the MCC, signed the pact in Washington, DC.
At that time, Nepal expected to mobilise $630 million — $500 million from MCC and $130 million from the Government of Nepal as counterpart fund — for installation of 300-km high voltage electricity transmission lines along with three substations of 400 kV and maintenance of roads with a total length of 305 km. As per the agreement, the projects needed to be implemented within five years from starting date of the project or the money would go back to the US.
The MCC had selected Nepal for a smaller threshold programme in December of 2011. The MCC and Nepal government had analysed constraints to economic growth and jointly prepared a policy improvement programme based on the results. Given Nepal’s strong performance in its MCC policy indicator scorecard through 2014, MCC’s board of directors selected Nepal as being eligible to develop a compact, a larger grant-based investment, under which the country could mobilise the US grant.
The compact programme was expected to address these constraints by investing in an Electricity Transmission Project (ETP) and a Road Maintenance Project (RMP).
At the time, ETP was expected to transform Nepal’s power sector by expanding and strengthening the high voltage electricity transmission network to support new investments in generation and allow greater cross-border electricity trade while the RMP was expected to improve the road maintenance regime in Nepal and complement existing efforts to build new roads by other parties.
Office of the Millennium Challenge Nepal (OMCN) — a Nepal government office that coordinates the development of MCC programme — in coordination with MCC, had finalised the projects that were going to be implemented under the MCC grant.
In a press meet held at Gorkha headquarters on Monday, Bhattarai shared that consensus among national parties was necessary on national issues like MCC. He said that the matters of nationality should not be mocked for the sake of party politics and factional politics within a party.
Likewise, former Finance Minister Ram Sharan Mahat has said that MCC is an urgent project for Nepal. He said, "The MCC is a project we signed in 2017 after rounds of negotiations based on our needs, but it is sad to learn that leaders are making it a political agenda," he lamented.
Similarly, former Minister for Foreign Affairs Prakash Sharan Mahat has said that it is sad to have one opinion while in the government and another when it comes to the opposition. He said, "We cannot say no to any aid or grant from any country. His question was why we were making the project controversial by dividing it into pro-government and anti-government even with this long-awaited US assistance. He was of the view that such actions could have a detrimental effect on the way donors view us.
Political analyst Arun Kumar Subedi opined that the MCC agreement was not disputed but a dispute was created. He expressed his belief that the MCC compact has been forcibly disputed, adding that it is the tradition of politics here to provoke the people by spreading negative excitement in the market and only to get votes by drawing attention to oneself. He said, “MCC project has fallen victim to such political parties and leaders.” “In the current situation, the MCC's protest is just a provocation on the streets,” Subedi said and added, "Since there is a provision that anyone can break the agreement by giving a 30-day notice, the government of Nepal can nullify it if it wants to."
According to a source, this project is a cornerstone in the trade of Nepal's hydropower sector. Just as the CPN-UML, which opposed the Arun III hydroelectric project in 1996, later admitted that it had made a mistake and Nepal resumed the project after nearly two decades, so too the protests against the MCC project may have to be regretted tomorrow. Therefore, it is important for every political party to understand such issues well now.
At least the national political parties need to unite against the misinformation about the MCC. At this time, there is a need for the fundamental feature of Nepal's parties to stand together in the national interest.
The issue of MCC also needs unity among the main political parties. Just as the national consensus among the political parties was seen when issuing the new political map incorporating Limpiyadhura, Lipulekh and Kalapani, it is still necessary
Nepali Congress President Sher Bahadur Deuba was reported to be in favour of MCC compact even when he was in the main opposition and is still in favour of passing the MCC.
Similarly, KP Sharma Oli, the erstwhile prime minister and chairperson of the main opposition party CPN UML, was also ready to pass the MCC in the parliament during his tenure, and he is still not against it. He has not yet said he will not pass the MCC. Oli has said that the idea of the ruling coalition should come first as it has a clear majority in the parliament. He also expressed this view with MCC Vice President, Fatema Sumar, who has recently visited Nepal.
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