Kathmandu, 24 April: After the Department of Government Efficiency (DoGE) there initiated preparations to cancel the Millennium Challenge Corporation (MCC), a U.S. foreign aid agency that invests in infrastructure in developing countries, uncertainty has once again surfaced in Nepal regarding the implementation of ongoing projects.
While the U.S. is already reassessing its foreign aid policies, the MCC had sent a letter to Nepal last March, granting permission to proceed with certain key procurement and office operations. Following that, it was expected that the programs being implemented in Nepal under the MCC’s $550 million grant would continue.
However, U.S. media reports have mentioned that the Department of Government Efficiency (DoGE) is planning to shut down the MCC, just as it previously closed USAID. In this context, uncertainty has once again emerged over whether Nepal’s program will continue or not.
If the MCC grant is discontinued, there will be uncertainty about how to construct the 315-kilometer high-voltage transmission line, three substations, and the road improvement project.
Following reports from U.S. media, employees of MCA-Nepal, construction contractors, and consultants have become concerned, according to a government source quoted by Onlinekhabar.
Earlier, on March 21, MCA-Nepal had issued a notice stating that the U.S. government, while reviewing its foreign aid policies, had granted permission to resume certain works under the MCC Nepal Compact. However, it was clarified at the time that this permission did not indicate any final outcome from the U.S. review.
MCA-Nepal also stated that it was awaiting updated details regarding the U.S. government’s review of foreign aid and was coordinating with the Government of Nepal and the MCC to ensure it fulfills its responsibilities in the meantime.
The New York Times reported that during the review, the MCC allowed five major infrastructure projects to resume certain key activities — Nepal being one of them.
However, some MCC staff have revealed that among the countries allowed to continue operations, Côte d’Ivoire was requested to shut down its program within four months, while Mongolia, Senegal, and Nepal were asked to do so within three months.
U.S. media also reported that in a staff-level meeting held on Wednesday, it was informed that the Department of Government Efficiency (DoGE) would prepare a resolution within a week on how to proceed, and the MCC board would approve it within a month.
Nepal had signed the MCC Compact back in 2017, but it took five years for it to be ratified by the parliament. “The deal, which involved building 200 miles of transmission lines and road infrastructure in Nepal, angered Chinese officials and sparked intense domestic debate before the government accepted the proposal,” The New York Times noted.
Leaders and other stakeholders who argued in favor of the MCC were accused by many of being American puppets and traitors to the nation.
“The suspension of this project’s grant by the Trump administration has caused concern among the very leaders who had previously supported it. Now, the future of the project is uncertain,” The New York Times wrote.
After Nepal was granted permission for procurement and office operations, there had been an expectation that the program would continue.
During a meeting with Nepal’s Foreign Minister Arzu Rana Deuba, who was on an official visit to India in early April, Senior Director of the U.S. National Security Council Ricky Gill also expressed optimism that the MCC program in Nepal would continue.
