The US $500 million-dollar Nepal will receive after ratification of the Millennium Challenge Corporation (MCC) Compact by the House on Sunday will be used in construction of transmission lines and upgradation of roads.
A whopping $ 398 million out of the amount will be spent on transmission lines including three new 400 kV substations at Nuwakot, Tanahu and Parasi. The transmission line starting from Lapsiphedi of Kathmandu will be connected to Hetauda in Makwanpur through Ratmate of Nuwakot.
The transmission line will also reach the Indian border from Ratmate via Damauli of Tanahu and Parasi. A total of 850 pylons will be erected with the money from MCC for the transmission line spanning almost 315 kilometers.
Similarly $52 million will be spent on upgradation of the almost 77-kilometer Dhankhola-Bhaluwang-Lamahi-Shivakhola section of the East West Highway.
The US grant will have to be used within five years. Counting, however, does not start from the day of ratification. "We will determine the day to start counting after pre-conditions for implementation are completed. We call that entry into force. Counting of five years starts from that day," Executive Director of the Millennium Challenge Account (MCA) Nepal Khadga Bahadur Bista said.
MCA-Nepal chaired by the finance secretary of the government will lead the works for construction of transmission lines and upgradation of roads.
He pointed that tender process to pick the contractors could not be moved forward in lack of ratification while procurement of land for sub-station at Ratmate, other sub-stations will be built at the land already procured by the Nepal Electricity Authority (NEA), and distribution of compensation has also not been completed.
He added that land under the pylons should also be acquired and brought under the MCA-Nepal while rent should be paid to the owners of the land under the electric wires. He stated that all these works should be completed before starting counting but added that this will not take a long time.
He revealed that MCC will not release money if the works are not completed within five years once the counting starts.
The project is worth US $ 630 million with Nepal contributing $130 million to go with the American grant. He said that Nepal can leave works done with the Nepali contribution pending but not those done with the American money. "Nepal should, therefore, determine the date for entry into force after careful deliberation."
He added that the date for counting should be determined only after completing all the preparations creating a situation for the contractor to go to the field along with the equipment. Reminding how construction of most of the projects in Nepal are delayed he stressed that Nepal can ill afford such delays over implementation of the projects under the MCC.
"The five years of MCC means 1,825 days. Nepal will have to pay the contractor if there is dispute over say 10-12 pylons and the contractor goes back. Preparations are, therefore, important," he explained.
Pointing that there have been problems in construction of transmission lines in Nepal due to different disputes including about permission to cut trees, he said Nepal should be careful to ensure there is no delay.
MCC releases money in different stages including Compact Facilitation Fund (CFF) for preparations and Compact Implementation Fund (CIF) for implementation. He added that the Finance Ministry has currently released money for preparations.
"The US grant won't arrive if the works are not completed in time once we start the clock for five years. Completing works in time after starting the clok would be appropriate for us. It will be success of MCA-Nepal."
