Nepal’s private sector has called on the government, political parties and other stakeholders to pass the Millennium Challenge Corporation (MCC) Nepal Compact immediately saying that this key infrastructure project is crucial for propelling development of the country. Issuing a joint statement on Wednesday, three umbrella organisations of the private sector – Federation of Nepali Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC) – called for endorsing the project by ensuring the national interest of the country. The organisations have stated that the MCC compact would ensure timely construction of transmission lines and maintenance of strategic roads and support in high economic growth. They said that since Nepal has been in need for a huge investment to take her tattered economy back on track, it is necessary for the country to implement the US aid programme.

There is hardly any sector in Nepal that has remained unaffected by the lingering COVID-19. The country’s economy has become the worst-hit with the outbreak of the pandemic. This sector has been scrambling to recover amid the appearance of COVID-19 waves one after another. With shrinkage of internal resources and remarkable fall in the amount of foreign assistance, the country is now facing challenges of reviving the battered economy and implementing development and other infrastructure-related projects. The protracted political instability has been yet another factor to hamper the nation’s development endeavours. The MCC Nepal compact may be a great support for Nepal’s economy in the post-COVID scenario. But this US aid programme has failed to go through due to lack of political consensus. In September 2017, the Government of Nepal and the MCC had inked a deal to implement the MCC compact in Nepal. Under the MCC programme, Nepal is entitled to receive US$ 500 million in aid. The programme is supposed to begin in June 2020.

The grant will be spent on the construction of electricity transmission lines and the maintenance of a certain section of the East-West Highway. Thus, the MCC compact may prove to be instrumental in the development of vital infrastructures required for the export of power in the long-run as the country is bracing for more hydropower generation. In addition, the country will stand to benefit from the MCC programme as it may contribute to unhindered transmission of electricity, a crucial development infrastructure. Under this assistance, the Electricity Transmission Project will build 312 km of 400 kV electricity transmission line and three substations and provide technical assistance for the power sector in Nepal. The transmission line will pass through 30 municipalities in 10 districts. As many as 856 towers will be installed to support the transmission line. Similarly, the Road Maintenance Project as part of the MCC programme will enhance maintenance of strategic road networks and will provide technical assistance to the Department of Roads (DoR) and Roads Board Nepal.

This grant aid programme requires to be endorsed by Nepal’s Federal Parliament. With the key political parties failing to reach an understanding in this regard, the MCC programme has not moved ahead for implementation. The MCC agreement was tabled in parliament in 2019. However, efforts are underway to forge a consensus to provide parliamentary approval to this programme. Minister for Foreign Affairs Dr. Narayan Khadka has underlined the need for the political parties to decide on the MCC compact at the earliest. Minister Khadka expressed the view while responding to the queries raised by members of the International Relations Committee under the House of Representatives on Wednesday.