March 28: The government has spent Rs 1.11 billion out of Rs 9 billion budget allocated to implement the Millennium Challenge Corporation (MCC) in the first eight months of the current fiscal year. Of the total spent budget, 16.28 percent has been spent under current expenditure and 11.57 percent has been spent as capital expenditure.
The government's indecisiveness regarding the US-funded MCC programme has led to poor spending of budget. If the MCC is not ratified by the parliament as soon as possible, a significant amount of budget will freeze, said a senior official at the Ministry of Finance. Only 12 percent of the allocated budget has been spent of which recurrent expenditure is higher than capital expenditure, said official on condition of anonymity.
The Millennium Challenge Account Nepal Development Committee has already been formed to implement the MCC programme. The government is bearing all the administrative expenses, as well as the fees of the consultants and international experts. The longer the parliament takes to endorse the programme, the higher the financial burden will be for the government. A total of Rs 20.86 million has been spent to provide salaries of the employees and operation of the committee.
The recently released second quarterly report by the MoF points towards lack of agreement behind the delay in the budget spending. Likewise, inability to procure required software, materials and delay in land acquisition is another reason.
"Unless the parliament endorses the MCC, it can't be implemented in full fledged manner," said Khadga Bahadur Bista, Managing Director of MCC-Nepal.  However the proposed project design, land acquisition process, EIA are about to be completed, he said.
To build a substation in Ratmate of Nuwakot, MCC-Nepal is acquiring 184 plots of land from locals of ward no.7 Belkotgadhi municipality.  The project is yet to provide compensation to 30 percent of the affected people. The government had signed the MCC grant agreement worth Rs 550 billion with the US government in September 2017.
As per the agreement, the US government would provide a grant of $50 million to build electricity infrastructure and increase road transportation. And Nepal government would contribute $13 million for the project. The government had agreed to fully implement the program from this year but hasn't initiated the work as per the agreement.
Since the political parties have failed to reach the agreement, endorsement of the program by the parliament has also remained uncertain.