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Foreign Minister NP Saud and his Indian counterpart S Jaishankar held a meeting in Bangkok, Thailand on Monday.

The duo held the meeting while taking part in the meeting of foreign ministers of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) member countries.

Both sides said that the meeting held during the two-day meeting of the foreign ministers of BIMSTEC in Bangkok was productive.

External Affairs Minister of India S Jayshankar said that the meeting with his Nepali counterpart was fruitful.

After the meeting, he said that India is ready to work with Nepal on the issues of mutual interest.

Chief Secretary Dr Baikuntha Aryal has directed various ministries and line secretaries to effectively implement budget, policies and programs for the current fiscal year 2023/24 and formulate plans accordingly.

In a meeting held at Singha Durbar on the first day of the current FY, he also directed the clearance of the arrears to effectively achieve the goals set by the government, said a secretary, who participated in the meeting.

The meeting also focused on resolving problems revolving around the bureaucracy to make it more credible, he said.

Donald Lu, the US assistant secretary of state for South and Central Asian Affairs, visited Nepal this week to take stock of the progress on the Millennium Challenge Corporation (MCC).

The US embassy in Kathmandu said Lu’s visit was a part of his regular diplomatic engagement in the region. In Kathmandu, he met with various leaders and ministers to discuss the progress on the MCC Compact to date.

The Compact has two components: construction of a transmission line and road maintenance. The transmission line project under the MCC envisions construction of  around 315 km of double circuit high capacity 400 kV transmission lines and three new electricity substations. The transmission line will pass through Kathmandu, Sindhupalchok, Nuwakot, Dhading, Makwanpur, Chitwan, Tanahun, Palpa, Nawalpur, and Parasi districts. 

Similarly, the road maintenance project will focus on the East-West Highway in Dang district. Based on the results of the pilot, MCA-Nepal will further complete the Lamahi to Shivakhola section. At present, the total road segment proposed for maintenance in the East-West Highway is approximately 77 km.

These projects are set to commence in August with a five-year completion deadline or by 2028. The projects will be executed by Millennium Challenge Accounts Nepal (MCA-Nepal).

Lu had played a vital role in getting the MCC endorsed through Nepal’s parliament. Nepal’s political parties were heavily divided on the issue of ratifying the Compact through parliament. Those against the Compact, mostly communist parties, had raised unfounded suspicion that the US was trying to deploy its army in Nepal in order to contain China.

The Compact was ultimately endorsed by Nepal’s parliament with declarative interpretation (which the US has not recognized) amid protests in the streets, as Lu had warned that the US could review its relationship with Nepal if the MCC was discarded. 

China too was against the MCC ratification, and had openly fallen out with the US on the issue. Beijing suspects that the Compact is part of the US Indo-Pacific Strategy to stop China’s growing influence.  

Though Nepal’s parliament has passed the MCC, the US is still not wholly convinced it will move ahead smoothly. This skepticism is not just born out of continuing political opposition to the MCC in Nepal, but also of the technical hurdles at the local level.     

The main hurdle, according to an official at the Ministry of Finance, is land acquisition for the transmission line project. In some areas, people are urging the MCA-Nepal to change the route of the transmission line because it falls right over their homes and farmland, which they are unwilling to let go. The modality of compensation for acquiring land has also not been finalized yet.  

In April, Khadga Bahadur Bisht, executive director of MCA-Nepal, had informed the meeting of the MCA-Nepal board of directors that a technical survey of the electricity transmission line was completed, except on some segments due to social issues. Three months later, the problem remains as it is.

There is a lack of cooperation between MCA-Nepal office and Nepal government officials to resolve the local and technical issues. The task of land acquisition is being undertaken by district administration offices.

Regarding the land acquisition, field verification is going on in seven districts, except in Nuwakot, Sindhupalchok and Kathmandu. With the MCC implementation set to come into force in August, the task is unlikely to be completed on time.

There is also the task of forest census, which too remains incomplete. Forest clearance is one complicated task which needs to be settled in coordination with the Ministry of Forest and Environment and its subordinates. Here too the MCA-Nepal office has been unable to coordinate effectively with the concerned forest offices.

CPN-UML leader Pradeep Gyawali, who is also former foreign minister, says the MCC should be implemented honoring the deadline without any obstructions as it has already been endorsed by the Parliament.

However, both government and MCA-Nepal officials are uncertain about timely completion of the projects. They are brainstorming whether to commence the project in August and gradually complete the remaining tasks or commence the work only after all outstanding problems have been settled. 

Despite the challenges and risks, one official said MCA-Nepal has fixed August end as an entry into force date for the MCC.  

The MCC Nepal Compact is a five-year $500 million grant agreement signed between Nepal government and the MCC in 2017. The Nepal government has agreed to invest an additional $197m in the program, for a total of $697m.

Initially, the project should have come into implementation in 2018 which was delayed by four years due to the controversy surrounding its parliamentary endorsement. 

Mrigendra Bahadur Karki, Executive Director, Center for Nepal and Asian Studies, says the central focus of the US in Nepal at the moment is smooth implementation of the MCC. 

He adds since the MCC was protested by internal and external forces, the US is worried that the same forces would not delay its implementation. 

Currently, there seems to be no significant political opposition to the MCC, but technical issues at the local level are likely to delay the project. In case of a delay, the MCC project cost is likely to increase and may require additional Rs 5bn to complete, say some officials. 

The Kathmandu District Court on Sunday extended the remand of 17 persons arrested in connection with the Lalita Niwas land grab case by five days.

According to SSP Dinesh Acharya of the Central Investigation Bureau of  Nepal Police, the court extended the remand for the fourth time today by five days.

"The investigation has been expedited so that it can be completed within 60 days," he said, adding, "Arrest warrants have been issued against some more people found involved in the case. Police are preparing to arrest them."

Seventeen individuals including Communications Secretary Krishna Bahadur Raut, Bhatbhateni Supermarket Chairman Min Bahadur Gurung and former election commissioner Sudhir Kumar Shah are in police custody.

The Kathmandu District Court had extended the remand for the first and second time by seven days, five days for the third time and five days for the fourth time today to keep them in custody.

Police had started an investigation in this case in a new way by detaining seven persons at a time on June 27.

Min Bahadur Gurung, Sudhir Kumar Shah, Dharma Prasad Gautam, Gopal Karki, Shivaji Bhattarai, Ghaman Kumari Karki, Baburaja Maharjan, Ramesh Kumar Pokharel, Dev Narayan Maharjan, Lokhari Ghimire, Dhruba Prasad Aryal, Krishna Bahadur Raut, Yograj Paudel, Narayandas Mishra, Rudra Prasad Shrestha, Bal Krishna Shrestha and Binod Paudel are in the custody.

Kaladhar Deuja, Surendraman Kapali and Hupendramani KC, however, were released on the basis of the court's stay order.