September 5: It has been almost four years since the Government of Nepal signed a grant agreement of Rs 55 billion with the US-funded Millennium Challenge Corporation (MCC).

After five years of negotiations, the then government led by Nepali Congress had signed the agreement with the MCC in Washington in September 2017.

The then Finance Minister Gyanendra Bahadur Karki and Jonathan G Nash, acting chief executive of MCC, had signed the agreement on behalf of their respective countries.

Four years down the line, the MCC grant agreement has become a topic of hot debate but the implementation part has not moved forward.

The two countries had also signed Programme Implementation Agreement (PIA) in 2019 to implement the agreement. The then Finance Minister Yuba Raj Khatiwada and Vice Chairman of the MCC Compact Operation Department Anthony Welcher had signed the PIA back in 2019.

As per the agreement, the United States had agreed to provide US$500 million in grants for two projects, and that the Government of Nepal would contribute $130 million for these projects. The fund would be utilized for road construction and repair and electricity production and construction of transmission lines.

A total of US$ 45 million was allocated for financial management of the projects which would cover the expenses of employees, administrative works, purchase of computer, monitoring, feasibility study as well as design and other office overhead costs.

Although Nepal has expressed its commitment to implement the agreement by completing all the procedures, the project has not moved ahead because it cannot be fully implemented without it being endorsed by the parliament.

Experts have raised concerns that the delay in implementation of the project in the last four years due to the dispute among political party leaders has given a wrong message to the investors. They also informed that the delay has only increased the cost of the project.

The former government led by KP Oli had presented the MCC agreement in parliament for endorsement one and a half years ago. However, the fate of the agreement still hangs in the balance as the parliament is undecided about the matter.

Former Finance Minister Ram Sharan Mahat says that the agreement has been put on hold due to political dispute among the leaders. This does not give a positive message to the  investors, argues Mahat.

UML Chairman KP Oli, who was in favour of endorsing the agreement while he was leading the government, is not in a wait-and-watch mood. Oli has accused the incumbent government of trying to endorse the agreement by keeping other parties in the dark.

Meanwhile, the ruling Maoist Centre is not in favour of endorsing the MCC agreement in its current form.

The Government of Nepal does not have to pay interest for receiving this assistance as it is a grant assistance. However, the ruling Nepali Congress has not been able to take a concrete decision on this regard yet.