MCC controversy continues, MCC officials return empty-handed

A delegation from the U.S. Government’s Millennium Challenge Corporation (MCC), led by its Vice President of Compact Operations, Fatema Z. Sumar, departed Nepal on Sunday empty-handed.

The delegation of two MCC officials, Sumar and Jonathan Brooks, MCC’s Deputy Vice President for Europe, Asia, the Pacific, and Latin America, had arrived in Nepal to convince the political parties to ratify the $500 million MCCNepal Compact from the parliament.

However, instead of convincing the political forces, they witnessed how the political parties and the Nepali Society were divided over the MCC. During their four-day stay, they met with community, business, and political leaders and discussed the economic opportunities provided by the compact and offered any needed clarifications.

However, people continued to protest in the streets against the MCC while the political parties, mostly ruling Maoist Centre and CPN (Unified Socialist) as well as the pro-royalists strongly opposed the programme stating that it was not in favour of Nepal. “It was a pleasure to be back in Nepal where we had such productive discussions with a wide cross-section of Nepali society from parliamentarians and party leaders to civil society and the business community,” said Sumar at a press conference organised to wrap her visit. The Government of Nepal signed the MCC-Nepal Compact in 2017 after spending nearly three years working with MCC and development experts to design and negotiate the grant programme. The compact, which is cofunded with an additional $130 million from the Government of Nepal, consists of two major infrastructure priorities: expanding access to affordable, reliable energy and making Nepal’s roads better.

The Electricity Transmission Project will focus on completing a segment of Nepal’s 400kV East-West transmission line and the Nepal portion of the second cross-border line with India, totaling approximately 300 km of powerlines – roughly equal to one-third of the entire country. This will enable Nepal to provide more reliable electricity to homes and businesses, modernise Nepal’s electricity grid, and support the increased trade of Nepal’s surplus energy. However, now the fate of the MCC has been uncertain.

Even Prime Minister Sher Bahadur Deuba said that the decision on Millennium Challenge Corporation (MCC) would be taken in coordination with the major political parties of the Federal Parliament. Addressing the meeting of the parliamentary party of the Nepali Congress (NC), PM Deuba said that the government would hold consultations with other political parties before deciding on MCC.

Former Finance Minister Gyanendra Bahadur Karki had signed the MCC under Deuba's premiership in 2017.

During her stay in Nepal, Fatema had met PM Deuba, the main opposition leader and CPN-UML chair KP Oli, Maoist boss Pushpa Kamal Dahal, chairman of the CPN (Unified Socialist) Madhav Kumar Nepal, Finance Minister Janardan Sharma and Energy Minister Pampha Bhusal among others. Before Fatema landed in Kathmandu, the Millennium Challenge Corporation (MCC) has clarified all the questions raised by the Government of Nepal regarding its disputed provisions.

The 13-page written response issued by MCC vice president Fatema Sumar in the name of Finance Minister Janardan Sharma failed to convince the leaders. Even CPN-UML which had tried its best to ratify the MCC when it was leading the government, changed its stance saying that the MCC could not be ratified without making amendments to its few provisions.