Projects financed by MCC to kick start Sept 2019

Published On: May 26, 2018 08:06 AM NPT

KATHMANDU, May 26: Projects for strengthening the country’s transport and energy infrastructure, financed by Millennium Challenge Corporation (MCC), may enter into implementation by September 2019, according to officials of the US Embassy in Kathmandu and the Government of Nepal.

The projects include maintenance of different roads and building of a major electricity transmission line. 

The project of US$ 630 million including MCC compact fund of US$ 500 million will kick start by the date. Government of Nepal will put in US $ 130 million for the project. 

“We have planned to complete all preparations of the project by the date and we will assure both the governments in the project execution by achieving all essential homework,” said Tulasi Prasad Sitaula, coordinator of Millennium Challenge Account (MCA), an entity established for overseeing the projects. The project preparations were started in September last year. The projects that have aimed to unlock binding constraints in the country’s economic development include building 300 km of the 400 KVA transmission lines including a portion of cross-border transmission line of Butwal Gorakhpur and maintenance of different roads of a total length of 305 km. 

The Government of Nepal has recently endorsed a MCA Development Committee Formation Order and also instituted a board of directors led by the Finance Secretary for executing the projects that are aimed at reducing poverty. 

A high-level US Embassy official said that they want all preparations put in place before kick-starting the project that begins countdown of the 5-year term. 

The MCC compact fund, for which Government of Nepal entered into agreement in September 2017, cannot be extended nor can it seek additional funds. 

Many are of the view that implementing this development projects with fixed cost and time in Nepal may be quite challenging as not a single project in the past have been completed in the given time and within the allocated budget. 

Sitaula however claimed that they will make sure all the preparations are in place before starting the projects.

The Government of Nepal also has to reach a key agreement with the Indian government for deciding a modality to build Butwal Gorakhpur transmission line. 

Sitaula said that a joint steering committee meeting of Nepal and India held in April in New Delhi has instituted a taskforce to work out development modality of the line. The taskforce is expected to come out with its report of electricity flow scenario between the countries in the next ten years. 

The Energy flow scenario will determine the investments both the countries have to contribute. The line is to enable two-way flow of electricity transmission between the countries. Environment impact assessment of the transmission line has recently started and both the governments are hopeful of completing this within next few months and other key preparatory works including legal arrangements and also land acquisition on time before starting the project.

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