A team including Alice Albright, Chief Executive Officer (CEO) of American Cooperation Project MCC, has arrived in Kathmandu. The team landed at Tribhuvan International Airport on Sunday evening and is scheduled to meet Prime Minister Pushpa Kamal Dahal on Monday.
This team has come to Nepal at a time when the US aid project worth 500 million dollars has been approved by the parliament and has been announced to be implemented, but it is still stuck due to a contract dispute.
MCA, Nepal has invited bids for the construction of a 315 km power transmission line of 400 kV capacity at a cost of 220 million dollars but has not been able to select a contractor.
A month has passed by in the calendar of the project which should be completed within five years.
Six companies have submitted their proposals so far. Out of them, only five have been selected through technical evaluation. All these proposing companies are Indian.
The US has taken this seriously after government officials, including Finance Minister Prakash Sharan Mahat and former Finance Secretary Arjun Prasad Pokharel, responded that the current process should be canceled and the bids should be re-invited, saying that there may be collusion between the contractors.
The Finance Secretary is the chairman of MCA Nepal.
On the one hand, the significant time of the five-year period for the completion of the project is running out, while on the other hand, the delay in the selection of the contractor is pushing the project towards uncertainty. On top of that, the responsibility of spending on the government of Nepal is increasing.
In such a situation, MCA-Nepal has written to the MCC Headquarters, Washington (USA) suggesting two options to solve the problem of how to proceed with the project, which are as follows-
Option 1: Budget addition
In the first option, the MCA-Nepal suggests that the budget should be increased through negotiations between the American government and the government of Nepal. He has also presented the calculation that should be increased by about 180 to 200 million dollars according to the current calculation. Of this, $180 million should be added only for transmission lines. Although tenders have been invited for the substation, the date for submitting proposals is still pending.
MCA-Nepal estimates that 20 million dollars will have to be added for this as the proposals may increase.
Option 2: Reduce specification and scope of work
As suggested by the MCA Nepal, in the second option, the specification and scope of work can be reduced and the work can be done within the specified budget. It has also mentioned the details of what can be reduced.
According to sources, the MCA Nepal has shown that $90 million to $95 million can be reduced. It is said that only the most important works should be done immediately and the rest can be completed by the Nepal Government or Nepal Electricity Authority by managing the resources.
Washington has not responded to the matter. Instead, it has sent a delegation comprising senior officials of MCC to Nepal to take stock of the real situation before giving a reply. Based on the report given by this delegation, the US government and MCC headquarters can take a decision.
What is the possible decision?
The issue of how much aid America will give to Nepal was already fixed. It was asked to select the project based on the 500 million dollars that it would give and the amount that Nepal could add to it. The initial cost estimate of the project selected by Nepal was also done by the MCA Nepal.
Therefore, the US may not consider both the options of increasing the budget or reducing the specification and scope of work.
On the other hand, MCC's budget, working conditions, standards, and framework have been approved by the Parliament of Nepal. When there is a fundamental difference in the document passed by it, it may have to be taken to the parliament for a decision.
Our past is enough to see what happened when MCC was taken to Parliament. There is no room to expect that the government, which has not been able to pass the parliament from school education to the civil service bill, which has purely domestic interests, can make an immediate decision on a project mixed with intense geopolitical interference.
If the US has to take the issue of reducing the budget to its own parliament, it will invite further complexities.
However, since the US has made the MCC implementation in Nepal a matter of its reputation if it says that it can give insufficient funds, it will be the easy way out. If the US does not increase the amount and the Nepal government has to bear the rest, it may create a new dispute.
The project will slide into a tunnel of uncertainty.
