Implementation of the Millennium Challenge Corporation (MCC) Project Begins
The highly anticipated Millennium Challenge Corporation (MCC) project is set to commence implementation from Wednesday. The MCC project, with a five-year implementation period, is scheduled to kick off on August 30, 2023, which corresponds to the 13th of August in the Nepali calendar. An official announcement regarding this milestone will be made today at a program organized by the Ministry of Finance.
According to Article 7 of the agreement between the Government of Nepal and the American Cooperation Mission MCC, the agreement's effectiveness is tied to the date of MCC's letter sent to the Government of Nepal, signifying their readiness to implement the agreement, contingent upon MCC's satisfaction with the fulfillment of necessary preconditions.
Article 7.4 of the agreement specifies that the agreement will remain in effect for a five-year period starting from its implementation date. The project contract was officially signed on August 30, 2023, with a completion deadline of August 29, 2028. Should the project not meet this deadline, MCC retains the right to reclaim any remaining funds allocated. As a result, there is considerable pressure to ensure the timely completion of these projects.
While the contract process for the projects is already underway, land acquisition for the project sites has yet to be completed.
In 2074, Nepal entered into an agreement with the U.S. government's MCC to receive USD 500 million in grant support for infrastructure projects. Nepal is contributing $130 million to the project's cost, equivalent to approximately 83 billion Nepalese rupees.
In 2014, MCC selected Nepal as an 'eligible' country for its program. Subsequently, following Nepal's persistent efforts, the U.S. committed to providing $500 million through MCC. The government of Nepal is also investing $130 million in the program, resulting in a total investment of $630 million (approximately 83 billion Nepalese rupees) in the MCC project.
In May 2022, MCC Assistant Vice President Jonathan Brooks, along with the then Secretary of the Ministry of Finance and the then President of MCA Nepal, Madhukumar Marasini, signed a memorandum of understanding, stipulating that the agreement would take effect in August 2023. Although some preparatory work remains, implementation is poised to begin on August 30, as outlined in the agreement.
The government has allocated a budget of 10.84 billion Nepalese rupees to the Millennium Challenge Account (MCA) for the current fiscal year. Out of this allocation, 1.1 billion 174 million rupees are earmarked for current expenditures, while 9.92 billion rupees are allocated for capital investments.
According to the Ministry of Finance, in the previous fiscal year 079/80, an allocation of 9 billion 27 crores 97 lakhs rupees was made, but only 4.11 billion rupees were expended.
Under the MCC project, several transmission lines will be constructed, extending from the Indian border to New Butwal, New Butwal to New Damauli, New Damauli to Ratmate (Nuwakot), Ratmate to Hetaunda, and Ratmate to Lapsifedi (Kathmandu). These transmission lines will have a capacity of 400 KV. Additionally, three 400 KV substations will be erected at Ratmate, Damauli, and Butwal. Approximately 580 million US dollars will be invested in projects related to the transmission lines.
Furthermore, the MCC project includes a road improvement plan, involving the enhancement of a 77-kilometer stretch of road from Bhaluwang in Dang to Seema Shiv Khola in Banke.
