A source told Republica that the WB took the decision after the government and other stakeholders of Nepal´s peace process could neither prove or disapprove the reports that the allowances for the PLA combatants were being used for political purpose of UCPN-M.
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In the infamous Shaktikhor videotape leaked to the media in May, Maoist Chairman Pushpa Kamal Dahal made some startling revelations, including highly inflating the number of Maoist combatants, and using the funds for revolt.
Of the US$50 million grant approved by the WB´s board in May 2008 under the Nepal Emergency Peace Support Project (EPSP), US$19 million was earmarked for allowances for Maoist combatants.
As per the previous agreement, the government was supposed to conclude the process of army integration by January 2009. However, the WB extended the project till the end of mid-July as per the government´s request. WB has said that it is no longer funding the allowances as there has been no further extension of components of the EPSP that supports allowances for the combatants. However, the WB has said that it will continue to support other components of the project, like compensating families of war deceased.
The sources also said that the WB also informed that government that it will also not reimburse the amount that the government has already spent in providing allowances to the combatants.
The WB has reportedly informed the government that it is willing to spend the amount in other sectors that can directly help Nepal achieve a long-lasting peace and minimize future conflicts.
The grant under the EPSP was designed to pay compensation of Rs 100,000 each to the families of the war deceased and to support Rs 5,000 per month to approximately 19,600 verified Maoist combatants.
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