MCC project comes into enforcement

 Kathmandu, Aug. 30

The transmission line development and road maintenance projects with the joint support from the Government of Nepal and Millennium Challenge Corporation (MCC) of the United States of America have officially started from Wednesday.

Minister for Finance, Dr. Prakash Sharan Mahat and Vice President – Compact Operations at the MCC, Cameron Alford, exchanged the letter on the Entry into Force (EIF) of the Nepal Compact project at a programme organsied at the Ministry of Finance (MoF) on Wednesday afternoon.

The US$697 million infrastructure development project is being carried out by the Millennium Challenge Account Nepal (MCA-Nepal), an agency created under the MoF.

A joint statement issued by the government and MCC stated that the milestone follows an agreement between GoN and MCC that substantial progress on project preparation has been achieved. EIF is an important milestone for MCC compacts as it marks the fulfillment of necessary conditions and preparation to ensure successful completion of the compact projects within a five-year timeline.

"We are happy to mark this milestone to implement the Electricity Transmission Project – a designated National Pride Project – and the Road Maintenance Project, which will invest in Nepal’s strategic road network,” said FM Dr. Mahat.

He expressed his belief that the MCC Nepal Compact with projects that will support Nepal’s growth will benefit the people of Nepal from better roads and more reliable electricity.

Likewise, Alford said that it is an exciting moment for the MCC-Nepal partnership.

“Together, we will advance economic growth by creating business opportunities for Nepalis, improving road maintenance on the strategic road network, and finding innovative ways to improve the reliability of electricity all while protecting the environment,” he said.

US Ambassador to Nepal, Dean Thompson, said on the occasion that the USA and Nepal have shared a strong friendship for more than 75 years, and the MCC-Nepal Compact is an exciting milestone in their friendship.

"It will boost the prosperity of Nepal for long term, provide good jobs, and improve access to electricity and transportation for Nepalis," he said while expecting to see an incredible impact the Compact will have in advancing economic growth in Nepal.

Executive Director of the MCA-Nepal, Khadga Bahadur Bisht, said that his agency would put its efforts to complete the projects successfully within the set budget and time frame as per the direction from the government and with MCC's cooperation.

Nepal and MCC signed the MCC Nepal Compact on 14 September 2017 for two projects, the Electricity Transmission Project and the Road Maintenance Project, which will work to increase the reliability of electricity and lower the cost of transportation in Nepal.

The program is co-funded by the US Government’s MCC Compact grant of USD 500 million and the GoN's contribution of USD 197 million.

Earlier, the EIF date was set for June 30, 2020 but the process was delayed as the parliament failed to ratify the agreement within the given time. The agreement was ratified by the House in February 2022.

The Electricity Transmission Project will build 312 km of 400 kV electricity transmission lines and three substations and provide technical assistance for the power sector in Nepal. The 312 km of transmission line will pass through 30 municipalities of 10 districts. Altogether, 856 towers will be installed to support the transmission lines.

The locations for the three substations are in Ratmate, Damauli and New Butwal.

Likewise, the Road Maintenance Project aims to enhance current practices in the maintenance of Nepal’s strategic roads network and will provide technical assistance to the Department of Roads (DoR) and Roads Board Nepal.

Maintenance interventions will include pavement improvement techniques and safety enhancement features. New pavement improvement technology adopted are Full Depth Recycling (FDR) and superpave asphalt concrete which follows the principle of recycling existing pavement materials.

Nepal has already completed the six primary conditions to begin the implementation. They include declaring the project as a 'national pride' one, establishing Electricity Regulatory Commission, signing of Project Implementation Agreement, signing of operational work plan and agreement with India for cross-border transmission line, ratification of the Compact by the parliament, and completing the land acquirement.

Meanwhile, MCA-Nepal has completed the preparation of the Environment Impact Assessment (EIA), finalised the Environment and Social Impact Assessment report, and Social and Gender Inclusion Plan. 

Published in The Rising Nepal daily on 31 August 2023.