KATHMANDU, Aug 23:The Millennium Challenge Corporation (MCC) Compact will come into full-fledged implementation from August 30, with the authorities concerned fixing the date for Entry into Force (EIF).

 According to the Millennium Challenge Account Nepal (MCA-Nepal), its board meeting held on August 16 fixed the aforementioned date for the EIF. In September 2017, the US Government’s MCC signed a US $500 million grant agreement with the Government of Nepal.

"The MCA-Nepal Board of Directors has decided to enter the implementation stage EIF of the MCC Nepal Compact Program on August 30, 2023," MCA-Nepal said. "Some work related to land acquisition and compensation distribution is yet to be completed, but once the program is implemented and the selected construction companies will have access to the site, MCC Nepal Compact will solve the issue in advance.”

The project work related to power transmission line and road construction to be implemented under the MCC Nepal Compact should be completed within five years of the announcement of the EIF date. In this regard, the counting of the five-year period will start from August 30.

The EIF was supposed to be implemented since June 30, 2020. However, impediment in endorsing the MCC from parliament and failing to manage the prerequisites related to the projects led to the delay in inception of the EIF.

According to the MCA-Nepal, out of six pre-conditions identified for implementing the EIF, five have been accomplished. Signing the agreement to implement the projects, declaring the MCC as national pride projects, forming the Electricity Regulatory Commission to regulate the sector and taking consent of the Indian Government to build Butwal-Gorakhpur transmission lines, are among the clauses that the Government of Nepal has maintained so far.

However, the land acquisition for the EIF has not been finalized till date. According to the MCA-Nepal, a total of 1,471 hectares of land is needed to construct electricity transmission lines.

An additional 20 hectares of land will be required to construct Ratamate Substation in Nuwakot. Likewise, 104 hectares of land will be needed to erect 856 transmission towers.  MCA-Nepal says it has already started providing compensation for the land to be acquired.

With the delay in implementation of the projects under the MCC, the financial liability of the government has also increased by US $67 million. Earlier, the GoN was supposed to bear the cost worth US $130 million. But in the revised costs, the government will face the financial liability of US $197 million.   

 
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