The three-member task force formed by the ruling Nepal Communist Party to study the Millenium Challenge Corporation Nepal Compact has suggested that the government not endorse the compact in its current form.

“We studied the provisions of the MCC thoroughly and found some serious issues which need corrections,” said Jhalanath Khanal, convener of the three-member task force. “This agreement cannot be implemented without correcting those provisions.”

Read: Why the MCC compact courted controversy in Nepal

Khanal, who is a former prime minister, handed over the report to party chairs KP Sharma Oli and Pushpa Kamal Dahal on Friday.

After a majority of members at the meeting of the central committee—the most powerful body of the ruling communist party—raised questions over the MCC, the meeting had decided to form a three-member high-level task force led by Khanal to study the compact and make necessary recommendations.

The task force consists of Khanal, Foreign Minister Pradeep Gyawali and standing committee member Bhim Rawal. While Gyawali, as a member of the Cabinet, has spoken out in favour of the MCC, Rawal has long been a vocal critic. Khanal was a swing vote, even though he too had expressed some reservations.

Read: Despite reservations, MCC compact will be ratified, officials say

Rawal has argued that the US-led MCC, which provides a $500 million grant to Nepal to build infrastructure, undermines national sovereignty and integrity. Many have also questioned whether the MCC entails Nepal’s participation in the US’ Indo-Pacific Strategy, which many believe is Washington’s foreign policy agenda aimed at countering China in the region. As the MCC includes a provision that states that it will prevail over domestic laws in case of a conflict, it requires parliamentary approval.

With the task force’s recommendation, the Oli administration is in a fix. Prime Minister Oli had claimed that the MCC would be endorsed via the Parliament’s winter session. That does not look likely any more.

According to Khanal, the party is duty-bound to abide by the recommendations of the high-level task force.

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