The private sector has urged Prime Minister Sher Bahadur Deuba to build a coalition of parliamentarians to ratify the Millennium Challenge Corporation (MCC)’s Nepal Compact Program at the earliest.

Representatives of the Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries, Nepal Chamber of Commerce, Nepal-US Chamber of Commerce and Industry and the Federation of Contractors’ Association of Nepal sent a joint memorandum to the Prime Minister on Sunday.

“While the country faces a huge shortage of resources to meet the enormous infrastructure needs, dialogues between the Ministry of Finance and MCC have cleared the issues. On the other hand, backtracking from an already signed international agreement will spoil the image and erode the trust-worthiness of Nepal in the global community, driving away foreign investors as well as donors,” read the joint memorandum.

They also urged Prime Minister Deuba to take firm, principled and affirmative action to ratify the agreement from the parliament. According to them, the private sector believes that the project is crucial to Nepal’s economy and the stakeholders fully support the MCC Nepal Compact.

In response, PM Deuba said that MCC was an important development project for Nepali economy and the government was trying to forge consensus among the political parties to ratify the program through the parliament, President of NUSACCI, Kiran Prakash Saakha quoted the PM.

MCC is a US government agency with whom the Government of Nepal has signed an agreement to implement a US$ 630 million, $500 million from the MCC and $130 million from Nepal, program to construct large transmission lines, including Butwal-Gorakhpur cross-border transmission facility, and rehabilitate strategic roads.

MCC has two components – Electricity Transmission Project and Road Maintenance Project. The former will build 312 km of 400 kV electricity transmission lines and three substations and provide technical assistance for the power sector in Nepal.

The latter project aims at enhancing the existing practices in the maintenance of strategic road network and will provide technical assistance to the Department of Roads (DoR) and Roads Board Nepal.

According to them, the projects under the compact are priorities set by Nepal in consultation with the civil society, private sector and numerous other stakeholders.

“A joint team of economists working on behalf of the government of Nepal and the United States conducted extensive due-diligence analysis for several years, proactively engaging a wide array of stake-holders both within and outside of the government,” read the statement further adding they concluded that there are four main binding constraints to economic growth in Nepal: policy implementation uncertainty; inadequate supply of electricity; high cost of transport; and challenging industrial relations and outdated labor laws and regulations.

The statement also noted that with billions of rupees being invested in power projects in Nepal at present and in the absence of adequate power transmission infrastructure, the generated energy will be wasted. This is something that the Nepal Electricity Authority (NEA) has been reiterating.