The Nepal Weekly 
March 15, 2022As soon as the Millennium Challenge Corporation (MCC) a US funded grant project is put into implementation, around 7,000 Nepalese labourers will find job for the period of five years. It will take around 15, 16 months to complete preparation works under the US $ 500 million grant project, which is more tough job for Nepal, says Khadga Bahadur Bishta, CEO at the Millennium Challenge Account Nepal Development Committee. “In Nepal it is very difficult for acquiring land for such projects, and we hope to complete the task within next 15, 16 months,” he said in a brief encounter with The Nepal Weekly. After that the main task of installing 400 KV transmission lines and setting up of substations will be carried out within the next five years period, he added. During the construction of transmission lines the MCA Nepal will have to recruit 7,000 employees for the period of five years and after the completion of the project some 200 staff will have to be recruited permanently, he informed.
Nepal’s Parliament recently endorsed the US $ 500 million grant project, the single largest grant assistance Nepal has ever acquired from foreign donor country in the history. Under the project Nepal government needs to invest 130 million while the US will provide a grant assistance of $ 500 million dollar. Out of the total project cost $ 400 million will be spent for constructing transmission lines while the remaining money will go for upgradation of high ways in Western Nepal and to cover other administrative expenses.
MCC Compact in time line:
In 2068 B.S. during the premiership of Dr. Baburam Bhattarai, Nepal government was informed that it was selected for the MCC threshold program. In the same year Nepal government appointed chief of foreign assistance coordination division as liaison officer for the purpose of coordinating with the MCC Compact. In 2070 B.S. during the premiership of Khilraj Regmi, Nepal government had formed a group of economists to carry out constraints Analysis to move forward the grant project.
In 2071 during the premiership of Shushil Koirala, MCC had informed that Nepal was qualified for the US $ 500 million US grant project. In the same year Nepal government appointed former secretary Krishna Gyawali as national coordinator for the preparation of the MCC Compact and a direction committee was formed under the convenorship of then Finance Minister Dr. Ramsharan Mahat. A year after that during PM Koirala’s tenure itself an agreement was signed for accepting technical assistance to conduct study regarding potential project.
In 2073 B.S. during the premiership of K.P. Oli, an agreement was signed to accept technical grant assistance in order to formulate draft of the Compact and to conduct study on the potential project.
In 2074 B.S. during the tenure of Pushpa Kamal Dahal “Prachanda” a dialogue committee was formed involving the two sides.
In 2074 B.S. during the tenure of PM Sher Bahadur Deuba, the government endorsed the decision to submit a proposal for accepting MCC Compact in the cabinet. In the same year Nepal government and the US government signed in the US $ 500 million MCC Compact.
In 2019during the tenure of then PM K.P. Oli Nepal government registered the MCC Compact in the Parliament for ratification. In 2022 February 27, Nepal’s Parliament endorsed the $ 500 million grant project with overwhelming majority through a voice vote. Only four Lawmakers stood against it.
Under the project a transmission line will be constructed from Lapsifedi of Kathmandu to Ratmate of Nuwakot and another transmission line from Ratmate to Hetauda and the third transmission line from Ratmate to Damauli. Similarly, a transmission line will be constructed from Damauli to Butawal and another transmission line from Butawal to Nepal – India border. There will be three substations in Ratmate, Damauli and Butawal.
Under the grant assistance $ 400 million will be utilized for the construction of 312 km transmission line and sub-stations. Similarly, 52 million US dollar will be spent to upgrade around 100 km ways from Chandaruta of Kapilvastu Shivakhola lying in the border between Banke and Dang districts via Lamahi. The MCC Compact will also provide technical grant assistance to enhance reliability in energy sector and to increase sustainability of the MCC investment.
The grant assistance will also be utilized to construct 22 km cross- country transmission line between Butawal and Gorakhpur up to the Nepal – India border.
Acquiring 315 km land with the wide of 46 km for the is the toughest part of the job, he added. “THirty percent of the land belongs to the forest area while the remaining portion of the land is owned by the private sector, for which we have provide adequate compensation,” he added.
The project includes 3,000 MW capacity transmission lines, which are required for linking the electricity generated in the future to the national grid as well as exporting electricity to India, according to Bishta. Nepal is poised to generate 15,000 MW electricity within the next ten years the construction of the transmission line is essential for distributing the electricity within the country as well as exporting it to India, he said.
If we failed to construct the transmission lines the electricity to be generated from Budigandaki and Marsyangdi corridors among others will get wasted resulting in loss amounting to billions of rupees to Nepal in terms of royalty, according to Bishta.
Nepal’s Parliament endorsed the MCC Compact along with a 12 point Interpretive Declaration. THough, the 12 point declaration doesn’t include anything new which is not mentioned in the Compact, the declaration has helped in endorsing the agreement from the House of Representatives, he pointed out. There are international practice to add such documents for clarifying the main document, which also have legal validity, he added.
At present the MCA Nepal office situated at Hotel Yak & Yeti, Durbarmarg is equipped with 55 staff and it will soon become 66 with the increase of some 10-12 new staff, informed Bishta.
