As a taskforce formed by the ruling party to look into the US Millennium Challenge Corporation’s Nepal Compact gives final touches to its report, chances that agreement is ratified by Parliament during the ongoing session look slim.

A three-member Nepal Communist Party taskforce led by former Prime Minister Jhalanath Khanal is busy preparing the final report, which will recommend the leadership on the pre-conditions Nepal should put forward to the US for the compact to be ratified.

Bhim Rawal, a member of the taskforce, said that due to the code of conduct adopted by the taskforce, he can’t share the details of the report. “Once we complete the report and submit it to the party leadership, I will speak. But right now, I am bound by the code of conduct,” said Rawal.

The ratification of the US $ 500 million US grant for Nepal for two infrastructure projects (building of Lapsiphedi-Galchhi-Damauli-Sunawal transmission line and maintenance of around 300 km of roads on the East-West Highway) has become a prickly political issue for the ruling party. While the Oli camp wants to get the deal ratified, the rival Dahal faction opposes it.

The Khanal-led committee had submitted its preliminary report to the two chairs of the party on February 22. The report suggested that the grant agreement not be executed without amending some of the provisions that could be counterproductive for the country. The report had also said that the US needs to clarify the distinction between the MCC and its Indo-Pacific Strategy.

The Khanal-led committee also flagged issues related to the project implementation agreement between the Finance Ministry and MCC Compact Nepal and the procedure to release funds.

Party General Secretary Bishnu Poudel said he expects the report to be submitted early next week. “After receiving the report of the taskforce, we can say how the agreement will move ahead,” said Poudel.

The US grant agreement, signed in September 2017, became a topic of heated debate among various quarters of the country and the donor community. After the entire party was divided over the issue, the leadership formed the taskforce to look into the matter.

Amid the controversy surrounding the compact, the finance ministry said that due to a lack of budget, the fate of the entire project hangs in the balance as the US side has not released funds saying that the agreement hasn’t been ratified by Parliament.

But the issue was overshadowed after Prime Minister K P Sharma Oli went for his second renal transplant earlier this month.

Chances that the agreement is ratified by the House during the ongoing meeting look bleak as the session draws to a close within a few days. Bishnu Rijal, Deputy Head of the party’s Foreign Relations Department, said that as the ongoing House session draws to a close soon, the deal will not get through the House this time.

Some party leaders told the Post that if party leaders reach a consensus on the issue and Nepal and the US agree on pre-conditions set by Kathmandu, the MCC Nepal Compact could be ratified during the budget session, which is likely to begin at the end of April.

But a series of visits by US officials in February made it clear that amendment to the MCC Nepal Compact was not possible and the window for such negotiations is also closing as Nepal runs out of time to receive the fund, as per the agreement.

Though the deadline to ratify the deal elapses in June, Nepal could get an extension till September, sources say as issues such as land acquisition and preparation of environmental impact assessment reports for the transmission line to be built under the deal may not be completed by September.

The Oli government has already submitted the proposal for ratification to the Parliament Secretariat. But due to the ruling party’s indecision, the MCC compact hasn’t been put to vote.

Prime Minister Oli’s advisors, meanwhile, are confident that the compact will be ratified. “Personally speaking, I do not think the MCC compact will not get ratified by the House,” said Rajan Bhattarai, Foreign Relations Adviser to the prime minister.

Some top leaders of the ruling party are trying to find a “middle path” to get the MCC ratified, but they claim that “tough bargaining” has to happen within the ruling party and some “give and take” may happen between leaders for the MCC to sail through Parliament.

They say that as there are a host of disputed issues that need to be settled within the party, a package deal between the leaders could settle everything, including the MCC debate, a central committee member of the party told the Post.

Talking to mediapersons on Monday, Speaker Agni Prasad Sapkota said that MCC deal is being discussed by the top leaders of the ruling party.

“Since our discussion is focused on Covid-19 and others, not much debate on the MCC deal is happening inside the party. But parties are discussing it and the deal will be ratified when the right time comes,” said Sapkota.