November 7: Millennium Challenge Account Nepal (MCA Nepal) claimed to complete the US-funded Mission Millennium Challenge Corporation (MCC) project within deadline of five years despite the cancellation of the tender process of the 400 KV power transmission line to be built under the grant agreement.

The MCA Nepal, which is responsible for implementing the MCC agreement signed between the governments of the USA and Nepal, has not specified when the new tender bids will be issued even though the time is running out.

The officials of MCA Nepal said that with the entry into force of the MCC Nepal Compact on August 30, the preparations have been made so that the projects under it can be completed within five years.

MCA Nepal claimed it has made extensive preparations before starting the implementation to ensure that the projects are completed within the five-year deadline starting from August 30.

According to MCA Nepal, as part of the road maintenance project, four laboratories have been set up in the Department of Roads and the engineers of the department have been given training on full depth reclamation and super-pave asphalt technology.

MCA Nepal has selected an engineering consultancy to supervise the work of the construction company that will be in charge of transmission line and substation related work under the electricity transmission project.

According to MCA Nepal, the work related to land acquisition in the nine districts affected by the project is being carried forward rapidly. Meanwhile, MCA Nepal informed that nine district level sub-committees have been formed and meetings have been held to determine the compensation amount.

In order to fulfill an important task regarding the replanting of trees under the Forest Act of Nepal, forest consultants have started field work in five districts in coordination with MCA Nepal and Divisional Forest Offices.

According to MCA Nepal, the tender bids received under the advanced procurement process for the transmission line have been rejected, while the procurement process for the construction of the substation is ongoing. According to officials, this contract process has been canceled as per the MCC Program Procurement Guidelines (PPG).

"The cost mentioned in the bid received for the construction of the power transmission line was much higher than the estimated budget.  The difference is so vast that it cannot be resolved even after discussion with the bidder. Therefore, the MCA Nepal reached a conclusion to cancel the contract," said MCA Nepal in a written response to queries made by New Business Age.

 “MCA Nepal has not faced any significant obstacles after entering into the implementation of MCC Nepal Compact.”

MCA Nepal is expecting to receive support from the relevant ministries to facilitate the process of implementing the projects under this program.

The initial agreement for the project was signed between the Finance Ministry and the US government representatives on September 14, 2017.

However, the MCC was delayed due to widespread protest by a section of the society on the pretext that the grant agreement was allegedly a part of the Indo-Pacific Strategy of the US government.

After much debate and deliberations, the House of Representatives finally ratified the MCC grant agreement on February 27, 2022 with a 12-point explanatory note clarifying that the project should not be associated with any military alliance and that the grant agreement must abide by the Constitution of Nepal.

According to the initial agreement, the United States was supposed to provide US$ 500 million to Nepal for construction of cross-border transmission line and upgrading of roads while Nepal would have to contribute US$ 130 million for the project, expecting the total cost of the MCC project to remain at US$ 630 million.

But the 'supplemental agreement' over the MCC that was signed last year, demands the government to bear additional cost of US$ 67 million, seeking its total contribution of US$ 197 million for the enforcement of the agreement. In the beginning, Nepal was supposed to take up 20.63 per cent financial responsibility for the MCC project and now it has increased to 28.26 percent. The increased responsibility amount is equivalent to Rs 900 million.