MCA-Nepal prepares for transmission line project

The Millennium Challenge Accounts-Nepal (MCA-Nepal) has announced concrete progress in the implementation of the Millennium Challenge Corporation's Nepal Compact program, a US development grant program. The announcement of MCA Nepal, a special purpose vehicle (SPV) established to implement the MCC Compact, has come at a time when Jonathan Brooks, Deputy Vice President of MCC for Europe, Asia, the Pacific, and Latin America, is currently visiting Nepal. According to MCA-Nepal, six bidders have participated in a bidding process to construct the 315 km long transmission line. The bidders, all of whom are Indian contractors, were confirmed after the MCA-Nepal on May 22, opened the bid for the project.

Megha Engineering and Infrastructure Ltd, Power Mech Projects Ltd, Kalpataru Power Transmission Ltd, KEC International Ltd, Transrail Lighting Ltd, Tata Projects Ltd, and Larsen & Toubro Ltd participated in the bidding process. MCA-Nepal has said that the minutes of the bid opening with details will be made available on its website soon.

“These are companies participating in three separate packages of the transmission lines,” said a source at MCA-Nepal. “Even though the bid was opened for companies from all the world including from the United States and China too, only the Indian companies participated in the bidding process.” It is an important milestone for MCC which was mired in controversy before the MCC-Compact’s ratification by the Nepal’s House of Representatives on Feb 27 last year. The bidders have been confirmed ahead of the compact's entry into force in August this year. According to the MCA-Nepal source, many of the bidders have already worked in Nepal. However, the number of bidders appears to be relatively lower with only six companies participating in all three packages of the contract that include Lapsiphedi-Ratmate-New Hetauda 400kV D/C Transmission Line, Ratmate-New Damauli 400kV D/C Transmission Line, New Damauli-New Butwal 400kV D/C Transmission Line (Base), and New Butwal -Nepal/India Border 400kV D/C Transmission Line. The source said that Brooks visited Nepal to observe the preparatory works before the entry into force of the MCC Compact. With the political environment in the country becoming favorable, MCA-Nepal expects to implement the project without much disturbance. The SPV plans to complete determining the compensation to be paid to the owners of the land for the construction of transmission lines before the implementation date starts in August. The rules of the MCC require the compact to be implemented within five years after the start of the implementation date. Nevertheless, it will not be easier for MCA-Nepal to overcome the possible challenges related to the acquisition of land, a problem constantly appearing in other projects in the country as well. According to the MCA-Nepal source, the SPV also does not expect to complete the acquisition of lands when the implementation of the project begins. “It is impossible to complete land acquisition before the entry into force of the Compact,” the source said. Even MCC’s Deputy Vice-President Brooks had highlighted the importance of land acquisition and forest clearance during his meeting with Deputy Prime Minister and Home Minister Narayan Kaji Shrestha on May 20. “As the project should be completed in five years, Brooks brought up issues like the agreement between Nepal and India on the cross-border transmission line, land acquisition and forest clearance,” the Home Minister's secretariat said in a press statement. As Chief District Officer heads a committee to determine the compensation of the acquired lands and right of way for the transmission line, the US official sought support from the Home Ministry to ease the hurdles, according to Nepali officials. Brooks also met with Finance Minister Prakash Sharan Mahat on Monday. The two officials held extensive discussions on the remaining works to be carried out before implementing the project. Dr. Mahat expressed commitment to completing the project as soon as possible by concluding the important matters in the project cycle by fulfilling due legal procedures as soon as possible. MCA Nepal officials say that the MCC project has not been facing any significant political hurdles after its endorsement by the House of Representatives last year with an interpretative declaration. Deputy Prime Minister Shrestha also promised to implement the project successfully considering that the MCC Compact has already been endorsed by the Nepali parliament.