The visiting Chief Executive Officer of the Millennium Challenge Corporation Alice Albright said on Tuesday that the MCC has accepted and agreed to the 12-point interpretative declaration adopted by the Nepali Parliament on February 27, 2022.

Albright’s remarks come at a time when some sections of the Nepali political fraternity have been questioning whether the MCC has accepted the interpretative declaration. “That is why we started the MCC implementation in Nepal,” Albright said while addressing a press conference in Kathmandu. She is on a four-day official visit to Nepal.

Signed between the government of Nepal and MCC headquarters in 2017, the MCC compact courted various controversies in Nepal, delaying its ratification. But it was eventually ratified by the Nepali Parliament along with a 12-point interpretative declaration. Under the $500 million compact and Nepal’s contribution of $197 million, a 315-km 400kV transmission line will be built and part of the East-West Highway will be improved.

Earlier in August, the US Embassy in Kathmandu stated that it agrees with the interpretative declaration added to the MCC compact by the Nepali Parliament, and Albright reaffirmed the same during the press conference on Tuesday.

The interpretative declaration clarifies Nepal’s understanding that the MCC compact is just a development grant, it is not above the country’s Constitution and Nepal can terminate it if there is anything in it against national interest.

Before its ratification, some cross-party leaders said that the MCC compact was a part of the US military strategy. The interpretative declaration says Nepal shall not be a part of any strategy, military, or security alliance, including the US Indo-Pacific Strategy.

Albright is the highest-ranking MCC official to visit Nepal, who has come just a month after the MCC compact came into force from September 1 and the five-year countdown started.

In Nepal, she has met Prime Minister Pushpa Kamal Dahal, Deputy Prime Minister and Home Minister Narayan Kaji Shrestha, Finance Minister Prakash Sharan Mahat, Foreign Minister NP Saud, and Energy Minister Shakti Basnet, Minister for Physical Infrastructure and Transport Prakash Jwala, among others, and sought a credible assurance from them for timely execution of the two MCC-related projects.

“I had a wonderful conversation with the prime minister, former prime ministers, and ministers,” said Albright. “This is the project [sic] that will ensure more reliable energy for Nepal, road facilities, and the energy market.”

Albright added: “These two projects should be completed within five years and we are excited about that. Besides the MCC, the government of Nepal is putting in $197 million too, and we are happy that the government of Nepal has designated it as a national pride project. This is a project that is very ambitious and the MCA Nepal is working with its Nepali counterpart.”

Albright further said: “Over the past twenty years, we have successfully completed MCC projects on time in various countries. Despite some complications, we believe the projects can be completed on schedule in Nepal as well.”

The MCA Nepal was created as a special purpose vehicle to execute the two projects. Of late, the MCA Nepal is facing troubles after bidders overshot expected prices for building the transmission line.

After five technically-qualified bidders quoted prices much higher than the estimated cost for the transmission line, the MCA Nepal began reviewing the proposal. It had allocated $220.60 million to cover all three lots made public during the bidding process but the combined quoted lowest price for the three packages stands at $365.93 million.

The combined lowest quote amount is nearly 66 percent more than the estimated budget for all three packages. The MCA Nepal is negotiating with the bidders and mulling alternatives so that the MCC budget would not escalate and the timeline of the project would also not suffer. Khadga Bahadur Bisht, the chief executive officer of the MCA Nepal, said that they are negotiating with the bidders and that the timeline will be met. Bisht said the land acquisition process to execute the two projects is going smoothly.

“We are not facing any hiccups in the field. There are no local protests. The chief district officers are looking after the issue of land acquisition. We are gradually clearing the forests too,” said Bista.

He also said that there was no flaw in the design of the transmission line which could result in delays in the awarding of the contract for the transmission line.

“We are very optimistic… that we will finish the project in five years,” said Albright when asked to comment on the delay in selecting bidders for the transmission line. “The Nepal government has given us a very strong assurance.”

Albright has come to Kathmandu with other senior MCC officials this time.

Deputy Vice President for the Europe, Asia, Pacific, and Latin America (EAPLA) program Jonathan Brooks said he was confident that the issue with the transmission line will be resolved soon. “This is not unprecedented,” Brooks told reporters. On monitoring and evaluation of the project’s progress, Brooks said that they are very much committed to the evaluation and monitoring process and want every dollar being spent to have an impact.

“We have set very clear objectives. We are committed to evaluating the impact of the project. We follow a very rigorous evaluation even after its completion,” said Brooks.

There was also an issue regarding whether Nepal will be eligible to receive another MCC grant after completing the ongoing compact. “We will see whether Nepal will fit or not,” said Albright. “We have to look into the eligibility and if the US Congress will revise the thresholds to receive the second MCC compact after five years, Nepal can apply. Nepal is planning to graduate from the least developed country to a developed country by 2026 and if that is going to happen, Nepal may not fit the criteria.”

Dean Thompson, the US ambassador to Nepal, expressed sentiments similar to that of Albright and Brooks and asserted that the MCA Nepal will closely work with the government of Nepal to complete the projects on time and that they are very excited about their conversations with the Nepali leaders and officials. He did not want to delve into the geopolitics behind the MCC, but said that despite the spread of misinformation and disinformation, the projects have moved on in the right direction.

The MCA Nepal has transparently initiated the tendering process after extensive deliberations, said the US envoy. “We currently have four years and 11 months remaining, and the work is progressing smoothly,” Thompson added.