Kathmandu, Aug 8
The 630 million US Dollars (Rs. 71.19 billion) Millennium Challenge Compact (MCA) that aims to develop large transmission line and substation projects and rehabilitate strategic roads will enter into force from June 30, 2020.
The ‘Entry into Force’ date for the implementation of the MCA has been set in an agreement between the government of Nepal and Millennium Challenge Corporation (MCC) – an agency of the United States of America.
“The government took the decision about the date through the Ministry of Finance, after consultation with all relevant ministries and departments and the implementation agency, MCA-Nepal,” Khadga Bahadur Bisht, Executive Director of MCA-Nepal, said at a press meet on Thursday.
MCA-Nepal is a government agency formed by an executive order of the Cabinet as per the Development Board Act 1956 in order to manage the compact.
The projects include 318 km long 400 kV transmission lines, three large capacity substations and rehabilitate 318 km of strategic roads.
The MCC and Nepal have pledged by 500 million US$ and 130 million US$ budget to the programme respectively.
The Electricity Transmission Project includes programmes like increasing domestic electricity consumption by improving the availability and reliability of energy in the nation’s grid, construction of high voltage construction lines equivalent to one-third of the length of the country, construction of substations and power sector technical assistance.
The substations will be built in Ratmate of Nuwakot, Damauli of Tanahun and Butwal of Rupandehi districts.
Similarly, the Road Maintenance project will rehabilitate roads across the country.
“Poor road maintenance makes travel and transport of goods further challenging and expensive,” said Bisht. “To address the high cost of transit, the 52.2 million RMP aims to maintain road quality across the strategic roads network, preventing further deterioration of Nepal’s road network.”
Amaliya-Salyan Bazar road, Hetauda-Bhimphedi road, Kadmaha-Gaighat road, Dharan-Basantapur road and Charali-Phidim road are the part of the project.
For the reliable maintenance of the roads, the project will transfer latest technology like full depth reclamation.
According to Bisth, as the government was focusing on expanding the road network across the country, maintenance of the existing roads was neglected which had negative impact on the time and cost of transportation and road safety as well, so the MCA had given special attention to the road maintenance instead of creating new roads.
He said that maintenance of roads was more cost effective than building the new roads. The compact had set a condition that the government should gradually increase the road maintenance budget over the years.
It is estimated that about 23.5 million people would be benefitted from the ETP and 9 million people from the RMP.
Bisht said that following the announcement of the entry into force date, all implementation activities must be completed within five-years, as there were no provisions for time extension or cost increase.
“Therefore, we have made sound preparations for the projects so that there wouldn’t be any hurdles after they are implemented,” he said.
The failure to complete the projects by the deadline means the budget would go back to the MCC, USA.
As per the condition set by the MCC, Nepal has declared the ETP as a National Pride Project and pledged a legislation to create an Electricity Regulatory Commission.
The drafting and approval of the Environmental Impact Assessment and completion of proper land acquisition and forest clearance to finally obtain site access is currently progressing well, said Bisht.
Economic constraints analysis completed prior to the design of the Compact’s projects showed lack of sufficient and reliable electricity and high cost of transportation based on low road maintenance as binding constraints to economic growth.
Nepal had signed the compact agreement with the MCC on September 14, 2017.
Published in The Rising Nepal daily on 9 August 2019.
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