Prime Minister KP Sharma Oli has said that the fate of the United States Millennium Challenge Corporation’s Nepal Compact should be decided through discussions in the federal parliament.

Oli said political parties can discuss the matter but it is the federal parliament that has the authority to decide on it. Responding to the concerns raised by lawmakers on the government’s policies and programmes, he said on Tuesday that the government has already tabled the compact in Parliament and now it is upto the lawmakers to take a call.

The compact tabled in July last year is yet to be discussed among the parliamentarians. It has to be endorsed from both the House of Representatives and the National Assembly to come into implementation. “This government didn’t sign the agreement. However, it carries the legacy of the preceding governments,” Oli said. “Our diplomacy will be questioned if the MCC is not implemented”

The Nepali Congress-led government in September 2017 had signed the agreement with the US government. The United States agreed to provide $500 million in grant while Nepal would put in $130 million for the project that prioritises energy and roadways. This is the largest grant Nepal has ever received.

Nepal Communist Party (NCP) leaders including Bhim Rawal had questioned the intention behind incorporating two projects enlisted in the MCC in the government’s policies and programmes. The document says that 400KV transmission line projects—Lapsiphedi-Ratmate-Hetauda and Lapsiphedi-Ratmate-Damauli- Butwal—will

be built in the fiscal year 2020-21. Both the projects have been enlisted in the MCC. The policies and programmes are silent on the MCC

Commenting on the document, Rawal on Monday said the government was willing to implement the MCC, through the back door, by incorporating the two projects into the new programmes. “I ask the government to clarify if it wants to implement the MCC through the back door. If not, why has it been incorporated in the policy document?” he asked.

In response, Oli said the two projects, essential for power transmission, have to be implemented at any cost. “The projects will be constructed either through the MCC or by the government itself,” he said.

The MCC compact has become a contentious issue. While the main opposition Nepali Congress wants it endorsed without delay, the ruling Nepal Communist Party is sharply divided on it.

Congress President Sher Bahadur Deuba on Sunday said the MCC must be ratified by the federal parliament. Speaking in the House, he said Nepal must not lose the grant on any pretext.

NCP leaders Rawal and former prime minister Jhala Nath Khanal, however, have warned Oli not to move the compact in the present form. On Sunday, they wrote to the prime minister, reminding him of the recommendation of their three-member task force, which comprised the duo and Minister for Foreign Affairs Pradeep Gyawali. It recommended that the MCC should not be adopted in its present form arguing that the compact is part of the United States’ larger Indo-Pacific Strategy and its provisions could undermine Nepal’s sovereignty.

“If the political parties feel they don’t need the MCC, they can ask their lawmakers to vote against it. However, Parliament has to take a decision,” Oli said. The Speaker can initiate discussion on the compact if the Business Advisory Committee consisting of the chief whips and whips of the parties agree.