Millennium Challenge Corporation (MCC) Nepal Compact will go into the implementation phase from August 30. There has been an agreement to set August 31 as the entry into force of the MCC Nepal Compact. The MCA Nepal board meeting held on Wednesday agreed to consider the last of August as the entry into force (EIF) of the Nepal Compact.
The government officials in the MCA-Nepal board had initially said that the EIF should be moved ahead because of the lack of preparation. However, MCA Nepal, a special-purpose vehicle established to implement the compact, insisted that the entry into force be set for Aug 31. The countdown for the five-year project will begin from the day of EIF.
“The agreement has been made regarding MCC Nepal Compact's entry into force on Wednesday,” said a board member of MCA Nepal. It will be formalized after approval from the MCC headquarter.
As part of preparatory works, the project site should be cleared and the contract should be signed at the place where the project will be implemented. While the contract process of transmission line projects has already started, the land acquisition has not yet been completed.
According to the source, the announcement of entry into force has been made on the basis that the land acquisition will be completed by the time the contractors are selected.
A 315-km high-capacity transmission line will be built and a section of the East-West Highway upgraded under the $500 million US aid. Five segments of transmission lines to be built are—New Butwal-India Border (18km), New Butwal-New Damauli (90km), New Damauli-Ratmate (90km), Ratmate-New Hetauda (58km), and Ratmate-Lapsephedi (59km). Three substations will be built in Ratmate, Damauli, and Butwal.
Once completed, these transmission lines are expected to provide a vital missing link for power projects of different river basins to the existing high-voltage grid in Nepal.
MCC, the US aid agency has committed to provide $500m while the government had earlier pledged $197m to implement the transmission line and road improvement projects under the MCC Nepal Compact.
The government has allocated Rs 10.84bn for the MCA-Nepal for the current fiscal year. While Rs 9.27bn had been set aside for the entity in the last fiscal year, only Rs 4.11bn was spent, according to the Finance Ministry.
With only two weeks left for entry into force, the preparatory work of the MCA Nepal Compact is far from over. Mainly, the land acquisition for the transmission lines has not been completed. MCA-Nepal has to acquire lands in Chitwan, Nawalparasi and Nawalpur, Kavrepalanchok, Kathmandu, Dhading, Makwanpur, Palpa, Rupandehi, and Tanahun for the transmission line project.
Except for Kathmandu, the process of land acquisition has started in other nine districts but has been completed. A compensation and compensation determination committee has been formed under the coordination of the Chief District Officer.
Six Indian companies have submitted bids to construct the power line which will be constructed in three separate packages. An association of Megha Engineering and Infrastructure Ltd and Power Mech Projects Ltd along with Kalpataru Power Transmission Limited, KEC International Ltd, Transrail Lighting Ltd, Tata Projects Ltd, and Larsen & Toubro Ltd participated in the bid.
The three packages of the power line 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 high-capacity transmission lines will be built connecting Nepal’s major power consumption centers including Kathmandu Valley, Butwal, and Hetauda. This transmission line will also work as a bridge to link the eastern and western parts of the country with high-capacity transmission lines.
The MCA Nepal has also opened a tender for the construction of the substation. The last date for the submission of the bid is Sept 4.
The MCA Nepal is planning to move forward with land acquisition and implementation together. The contracts are likely to be signed by September/October.
