US envoy meets leaders as $500m MCC fund becomes uncertain

Published On: September 27, 2019 07:07 AM NPT By: Republica  | @RepublicaNepal

Inquires NC leader Deuba, senior NCP leader 

Nepal about their parties’ positions on MCC projects

KATHMANDU, Sept 27: As a sharp division among the leaders of the ruling Nepal Communist Party (NCP) puts the implementation of projects under the Millennium Challenge Corporation (MCC) in limbo, US ambassador to Nepal, Randy Berry, has intensified meetings with key political leaders in the country to understand Nepal's position on the MCC projects. 

Under the MCC grant, the US will provide US$ 500 million for various projects over a five-year period.

On Thursday, Ambassador Berry held separate meetings with the main opposition party, Nepali Congress (NC) President and former Prime Minister Sher Bahadur Deuba and senior NCP leader and former Prime Minister Madhav Nepal. During the meetings, Berry inquired about their parties' positions on the MCC projects. 

“Ambassador Berry showed concern over the delay in the implementation of the MCC projects. He also inquired if the remarks made by a section of lawmakers of the ruling party reflected the official position of the party,” sources close to Deuba and Nepal said.

Sources said Berry also hinted that any further delay in the implementation of the MCC projects could also result in the cancellation of the investment grant. Both the leaders, however, had assured that Nepal was committed to implementing the MCC projects as they stand to benefit Nepal. 
Earlier on Sunday, Ambassador Berry held a meeting with Prime Minister KP Oli. The issue of the delay in the implementation of the MCC projects also figured during the meeting, according to senior government officials.

These meetings come in the wake of the government shelving its plan to ratify the agreement signed between Nepal government and MCC in September 2017 amid sharp polarization within the ruling NCP over whether to accept the MCC fund which is allegedly tied to the Indo-Pacific Strategy — a strategy many in Nepal believe is devised to contain China.

The implementation of the MCC projects supposed to kick off from this month is set to be delayed at least until the next House session as the parliament session which concluded recently could not ratify it with differing views among ruling party lawmakers. Besides some road projects, Nepal plans to develop a 400-KV Nepal-India Butwal-Gorakhpur electricity transmission line with MCC grant.

A section of the ruling NCP lawmakers has demanded that the government renegotiate the terms and conditions of the MCC grant, arguing that the projects were tied to the Indo-Pacific Strategy. They argue that there was no mention of the Indo-Pacific Strategy when the MCC agreement was reached in 2017.

But since all US officials have been saying time and again that the MCC investment grant is also a part of the Indo-Pacific Strategy, the lawmakers have maintained that MCC projects should not be expedited under the current terms and conditions. 

Senior US officials during their meeting with Minister for Foreign Affairs, Pradeep Gyawali, in New York had also inquired about Nepal's position on the MCC projects. Minister Gyawali, according to sources, assured that the MCC agreements would be ratified through the upcoming House session and that there were no issues to hinder the implementation of the MCC projects. 

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