The Cabinet’s Sunday evening meeting was expected to come to a number of crucial decisions, including on the Nepal Communist Party’s nomination of Bamdev Gautam to the National Assembly, which has exacerbated existing divisions within the ruling party. But instead, Prime Minister KP Sharma Oli, in an unexpected move, decided to recall Leelamani Paudyal, Nepal’s Ambassador to China.

At the same meeting, Oli proposed former foreign minister Mahendra Bahadur Pandey as Paudyal’s successor in China. Pandey had been recommended for ambassador earlier in 2016 during Oli’s first stint as prime minister but had not been endorsed.

“What I can confirm for now is that Paudyal has been recalled,” said Surya Thapa, press advisor to Oli. “The reasons will be known later.”

But at least two ministers and multiple officials the Post spoke to said that the decision on Paudyal was not as sudden as it appeared and that it had been in the making for quite some time. Oli had long been unhappy with Paudyal, who was appointed Nepal’s envoy to China in October 2016 with a four-year mandate.

While recalling an ambassador prematurely is the government’s prerogative, Oli’s decision to recall Paudyal, according to party insiders, stems from the ongoing internal conflict in the ruling party.

Oli and the party’s other chair Pushpa Kamal Dahal are currently at odds over the party Secretariat's decision to nominate Gautam, the party vice-chair, to the National Assembly. Oli has been reluctant to nominate Gautam, but the Dahal camp has maintained that he is under obligation to abide by the party’s decision.

One party leader said that Oli specifically did not discuss Gautam’s nomination on Sunday and instead recalled Paudyal as a play against Dahal. Paudyal is believed to be allied with Dahal, as he was appointed ambassador to China during Dahal’s prime ministership.

After his election as prime minister in February 2018, Oli and Dahal merged their CPN-UML and Maoist party to form the Nepal Communist Party in May. But Oli ran both the party and government almost unilaterally for over two years.
Over the last few months, Dahal has managed to make a comeback by cultivating a number of influential former UML leaders, including Madhav Kumar Nepal, Jhala Nath Khanal and Gautam.

With the party locked in a factional struggle, Nepal has been attempting to broker a deal for a ‘win-win’ situation, where Oli will agree on Gautam’s nomination as an Upper House member and Dahal will allow Yubaraj Khatiwada, whose term as a National Assembly member is going to end on March 8, continue as finance minister.

Many believe that Oli’s move to send Pandey in Paudyal’s place could be part of a larger deal with Nepal to break Dahal’s alliance, which controls a majority in the nine-member Secretariat. Pandey, a long time UML member, has good relations with Nepal, according to party insiders.

“I had suspected this when Madhav Nepal skipped the commemoration of Bharat Mohan Adhikary’s death on Sunday,” said Hemraj Bhandari, a central committee member. “With Pandey’s appointment and the recall of Dahal’s pick, it seems that Oli is trying to appease Nepal.”

Oli had made a similar move in the past when differences grew between him and Nepal.

Oli had recommended Banshidhar Mishra, a leader from the Nepal camp, as the country’s ambassador to Bangladesh to patch over differences.

“This time too, Oli played a safe bet at a time when he is cornered in the party,” said a central committee member.

According to a minister who spoke on condition of anonymity, Oli had long been mulling over recalling Paudyal, as he was not happy with a series of events relating to Paudyal’s role as ambassador.

The first instance was in 2018 during Oli’s visit to Beijing, months after he was elected prime minister for a second term.

“Oli had talked about Paudyal’s activities which he found unbecoming of an ambassador,” said the minister. “Then in October last year, Oli was unhappy with Paudyal during Chinese President Xi Jinping’s visit to Kathmandu.”

Then at the end of last year, China saw an outbreak of the coronavirus.

“Paudyal started the process to evacuate Nepalis from Hubei Province, the epicentre of the virus outbreak, without consulting Kathmandu,” another minister in the Oli Cabinet, who also did not wish to be identified, told the Post. “The prime minister was already preparing to recall Paudyal but he shelved the plan until Nepalis were evacuated. Paudyal’s unilateral plan to evacuate Nepalis, however, did not go down well with the prime minister.”

After weeks-long preparations, the government in mid-February airlifted 175 Nepalis from Wuhan. All of them were cleared of the virus infection on Monday.

Insiders say that party dynamics will now depend on Nepal and how he reacts to Oli’s overture.

“Nepal will now determine the political dynamics of our party,” said Bhandari. “Things will only be clear after Oli returns from hospital.”

According to a leader from the Nepal camp, the senior leader could play a crucial role in balancing out the party if Oli makes the right moves.

“Madhav Nepal can play a crucial role in breaking the deadlock caused by Oli’s position,” said Jagannath Khatiwada, a central committee member close to Nepal. “In order to placate Nepal, Oli should also address the issues he raised in his note of dissent and ensure that the party runs according to its regulations.”

On Monday, Oli was admitted to Tribhuvan University Teaching Hospital in preparation for a kidney transplant on Wednesday.

But party leaders believe that Nepal will take the bait and switch sides to join Oli, effectively breaking Dahal’s hold on the party Secretariat.

“Nepal becomes happy with small achievements,” said a party leader who was a close aide to Oli during his first stint as prime minister. “Earlier, he was happy when his confidante Mishra was appointed ambassador. Now, Oli will attempt to appease him.”