The House of Representatives (HoR) has endorsed the much-awaited Millennium Challenge Corporation (MCC) Nepal Compact with majority votes. In line with Article 279 of the Constitution of Nepal, 2015, a draft treaty of the MCC compact was approved through voice vote on Sunday night after Speaker of the Lower House of Federal Parliament Agni Prasad Sapkota urged lawmakers, who were in favour of the US grants project, to raise their hands. Ruling coalition parties -- the Nepali Congress, CPN-Maoist Centre and CPN-Unified Socialist -- stood in favour of the MCC compact while the Rastriya Janamorcha (which is another partner of the governing alliance), Nepal Workers and Peasants Party and Rastriya Prajatantra Party voted against it. Although the main opposition CPN-UML has been obstructing the parliament for months, the reason is not to obstruct the MCC endorsement. However, one of its leaders Bhim Bahadur Rawal opposed the compact in the House meeting.

The MCC compact has received the sovereign parliament’s nod one week after the government tabled it for discussion and ratification. The endorsement has paved the way for the implementation of $630-million infrastructure development project. The MCC compact had been registered at the parliament about 31 months back. In 2017, Nepal and the United States of America (USA) had signed an agreement on the MCC compact. As per the deal, the US government is to provide $500 million grant for the project while the Government of Nepal will contribute the remaining $130 million. The five-year project aims to construct essential cross-border electricity transmission lines and upgrade and repair some strategic roads and highways. The MCC compact is regarded as the largest ever foreign grant Nepal is having for its infrastructure development. Such power supply infrastructure is necessary for Nepal as the country is planning to export electricity to India and Bangladesh.

The project was supposed to be launched on July 30, 2020. But it could not be implemented owing to lack of political consensus. As the agreement of the MCC compact was inked by the Sher Bahadur Deuba-led government about five years ago, PM Deuba and his party have been in favour of moving the grants project ahead from the beginning. In the course of garnering support from different political parties for the grants project, Deuba had even tried to take the UML into confidence. But the main opposition was reluctant to take part in the parliamentary process to ratify the project. Up until the 11th hour, even the ruling CPN-Maoist Centre and CPN-Unified Socialist were not for approving the MCC agreement in its current form. They wanted to ratify it only after amending some of its provisions.

After having discussed extensively, the ruling coalition came up with an idea of making an interpretative declaration from the parliament. With this move, the two leftist parties were finally ready to pass the MCC compact. The parliament discussed the MCC compact provisions one by one and made a 12-point interpretative declaration. Some of the major declarations include: Nepal shall not be a part of any US strategic, military or security grouping, including the Indo-Pacific Strategy, the MCA-Nepal shall be governed by the laws of Nepal, the MCC shall not have ownership over the Intellectual Property created under the compact, audits of activities and funds of MCA-Nepal shall be conducted by the Office of the Auditor General as per Nepal's laws, and Nepal shall have the authority to terminate the MCC compact by giving 30 days' prior notice in case the compact activities violate Nepal's laws or policies. Meanwhile, the US Embassy in Kathmandu has welcomed the decision.