In February this year, Nepal’s parliament decided to endorse the $500 grant assistance from the US under its Millennium Challenge Corporation (MCC) amid intense uproar from some political parties. Eight months later, the hullabaloo over the US program has subsided. It is no longer a political agenda for the parties who had raised a stink over its ratification. It will take another 10 months for the US compact to formally begin (Aug 23) their five-year time-bound projects. Signed in 2017, the MCC was scheduled to begin in 2019, but it got delayed due to the controversy generated by some political parties and a section of society over some of its provisions.

Since its endorsement, the two components of the compact, construction of transmission line and road maintenance, are taking off, albeit gradually.

Rajiv Dahal, information officer of Millennium Challenge Account Nepal, says there are no political or security challenges for project implementation. To speed up the construction of the transmission line, he tells ApEx that MCA-Nepal is handling the issues related to land acquisition for the construction of substations, lines, and key towers. Land acquisition process for setting up four sub-stations is almost over. There are some minor issues, but they will not pose a big problem. As for acquiring land for the tower and line, Dahal says the process may take some time because the affected population may raise some issues. Officials doubt the land acquisition process will be easily settled. Another challenge for the project is conducting forest census and clearing trees to erect around 850 towers. But despite the challenges, officials remain hopeful about starting the projects within the stipulated date. For this, they are closely working with the concerned district administration offices. Another component of the MCC is road upgradation. Again, there are a few challenges here. Initially, there was an agreement for carrying out upgradation work on road sections with a combined length of 305 km. But there have been some changes on the original plan. Now, under the pilot program, a 40-km section of the East-West Highway, from Shivakhola to Dhankhola in Dang district, will be upgraded adopting latest technology. Based on the success and experience of this pilot program, the road project could be expanded. Officials say there are no problems concerning the budget. The MCC headquarters that had previously withheld the funds following the program’s controversy in Nepal has been released now. The MCC headquarters, as well as the Nepal government, are releasing the required money for land acquisition and payment to international bidders. There have been some push backs against the MCC compact by fringe communist parties, including the Netra Bikram Chand-led Communist Party of Nepal, but not on a large scale. Meanwhile, China, which had previously expressed strong disdain for the US program, is maintaining a silence. The fact that major parties are not protesting the compact anymore is a respite for the MCC officials, though some politicians are still showing concerns over the 12-point interpretative declaration endorsed by Parliament along with the compact. While Nepal has been maintaining that the interpretative declaration is an essential part of the compact, the US side has not said anything. The current five-party alliance, which endorsed the MCC, is likely to return to power after the November elections. So officials expect the projects under the compact to move ahead smoothly. For more than three years, political parties were sharply divided over the MCC. Now, as the parties are busy preparing for the November 20 polls, the heavily contested topic has suddenly become irrelevant. Binoj Basnyat, strategic affairs analyst and a former Nepal Army major general, believes the MCC projects will move smoothly and that chances of opposition are very low. Once the projects start delivering and people start realizing their benefits, he says, there will be no room for opposition.