Private sector has urged Prime Minister Sher Bahadur Deuba to build a coalition of parliamentarians to ratify the Millennium Challenge Corporation (MCC)’s Nepal Compact Programme at the earliest.
It said that while the country faces a huge shortage of resources to meet the enormous infrastructure needs, dialogues between the Ministry of Finance and MCC have cleared the issues. “On the other hand, backtracking from an already signed international agreement will spoil the image and erode the trustworthiness of Nepal in the global community, driving away foreign investors as well as donors,” read a joint statement they submitted to the PM.
Nepal-USA Chamber of Commerce and Industry (NUSACCI) handed a joint statement of NUSACCI, Federation of Nepalese Chamber of Commerce and Industry, Confederation of Nepalese Industries and Federation of Contractor Associations of Nepal to the PM on Sunday urging him to take firm, principled and affirmative action to ratify the agreement from the parliament.
According to them, the private sector has the conviction that the project is crucial to Nepal’s economy and the stakeholders fully support the MCC Nepal Compact Programme.
In response, PM Deuba said that the MCC was an important development project for Nepali economy and the government was trying to forge consensus among the political parties to ratify the programme by the parliament, President of NUSACCI, Kiran Prakash Saakha quoted the PM.
MCC is a US government agency with whom the Government of Nepal has signed an agreement to implement a US$ 630 million, $500 million from the MCC and $130 million from Nepal, programme to construct large transmission lines, including Butwal-Gorakhpur cross-border transmission facility, and rehabilitate strategic roads.
It has two components – Electricity Transmission Project and Road Maintenance Project. The former will build 312 km of 400 kV electricity transmission lines and three substations and provide technical assistance for the power sector in Nepal. The latter project aims at enhancing the existing practices in the maintenance of strategic road network and will provide technical assistance to the Department of Roads (DoR) and Roads Board Nepal.
Power and transmission, a priority
“The implementation of the infrastructure projects to be built with the grant from MCC has been disrupted by the delay in ratification by the Federal Parliament,” read the joint statement.
According to it, the projects under the compact are priorities set by Nepal in consultation with civil society, private sector and numerous other
stakeholders.
“A joint team of economists working on behalf of the governments of Nepal and the United States conducted extensive due-diligence analysis for several years, proactively engaging a wide array of stakeholders both within and outside of the government,” read the statement further adding they concluded that there are four main binding constraints to economic growth in Nepal: policy implementation uncertainty; inadequate supply of electricity; high cost of transport; and challenging industrial relations and outdated labour laws and regulations.
Agreeing with these findings, the government concluded that power and transport infrastructure development were priority sectors for intervention.
The statement noted that with billions of rupees being invested in power projects in Nepal at present and in the absence of adequate power transmission infrastructure, the generated energy will be wasted. The Nepal Electricity Authority (NEA) has been reiterating this fact time and again.
Securing investment in 6,000 MW projects
Likewise, transmission lines are vital to get a return on investment in the 3,000 MW under-construction projects and additional 3,000 MW projects at various stages of development in Nepal.
The investments being made in power generation will be at risk if transmission lines are not constructed on time and it will have a huge impact in the country’s economy.
The private sector in the statement said that the MCC funded cross-border transmission project would help address the infrastructure inadequacies in the energy sector.
The statement is signed by President of NUSACCI, Kiran Prakash Saakha, Vice president of FNCCI, Dinesh Shrestha, VP of CNI, Birendra Raj Pandey, Senior VP, Kamlesh Kumar Agrawal, and VP of FCAN, Ang Dorje Lama.
However, Independent Power Producers’ Association of Nepal (IPPAN) did not sign the statement. Its President Krishna Prasad Acharya told The Rising Nepal that IPPAN is clear on the need of the electricity transmission lines and demands an early construction of it but it cares less about how and by whom it is developed.
While the project was scheduled to begin on June 30, 2020, it has been in controversy as some politicians and civil society organisations said that that the agreement undermined the sovereignty of the country and it was a part of the controversial Indo-Pacific Strategy of the USA.
Earlier initiatives
Earlier, in October, Nepali private sector had urged the political parties and other stakeholders to immediately pass the MCC’s Nepal Compact Project.
Three umbrella organisations of the private sector – FNCCI, CNI and NCC – had issued a joint statement then to pass the project ensuring the national interest of the country.
“MCC Project will ensure timely construction of transmission line and maintenance of strategic road and support in high economic growth,” read the statement. “In the post-COVID-19 pandemic scenario, Nepal needs a huge investment to take the battered economy back on track while the MCC Project will create electricity export base in the long run and transfer modern technology.”
Likewise, earlier in September, Vice President of Compact Operations of the MCC Fatema Z. Sumar had visited Nepal to facilitate the implementation of MCC-Nepal Infrastructure Programme but there were no visible impact of her visit towards materialising the project.
In December 2019, the Millennium Challenge Account (MCA) – Nepal, the implementing agency of the MCC grant programme in the country, had appealed to the parliament for the timely ratification of the project as it was set to kick off on June 30 of the following year.
Source : TRN,
