FNCCI and CNI welcomed the ratification of the Millennium Challenge Corporation (MCC) Compact by the House of Representatives.

Issuing press statements separately, the private sector umbrella organisations – Confederation of Nepalese Industries (CNI) and Federation of Nepalese Chambers of Commerce and Industry (FNCCI) – have appreciated the ratification of MCC Nepal Compact by the House of Representatives (HoR) citing that it will play an important role in infrastructure development of Nepal.

After long discussions and debates, the agreement reached between Nepal and Millennium Challenge Corporation (MCC) on September 14, 2017, was approved by the HoR on Sunday.

The government of Nepal and the MCC, a US government agency, had inked an agreement to implement a US$ 630 million compact – $500 million from the MCC and $130 million from Nepal – to construct large transmission lines and rehabilitate strategic roads.

Presenting the views on MCC Nepal Compact, the CNI said that the implementation of the project will play an important role in the infrastructure development of Nepal within the stipulated period.

The Confederation said, "As mentioned in the MCC Compact, the provision that construction should be completed within five years of project implementation would be a model for Nepal's development management.”

The CNI has requested the Millennium Challenge Account Nepal to create an environment for timely completion of the project in coordination with all stakeholders.

The 400 kV Lapsiphedi-Ratamate, Ratamate-Hetauda, ​​Ratamate-Damauli-Butwal transmission lines and substation to be constructed under MCC assistance are important for the improvement of Nepal's internal power transmission system and inland electricity trade.

Also, upgrading the Kapilvastu-Dang section of East-West Highway will be important for economic development, trade facilitation and improvement of living standard of the region, it said.

The CNI has said that everyone should think about the economic development of the country, job creation and improved living standard of the common people through the implementation of mega infrastructure projects.

The government and all stakeholders should focus on making maximum use of the assistance received from multilateral and bilateral bodies to support Nepal's economic development, it said.

The CNI urged for the successful implementation of projects such as the MCC for the economic recovery of Nepal, for the achievement of the goal of upgrading the country into a developing country and for the mobilisation of necessary resources for upgrading Nepal into middle-income country.

The Confederation has said that the foreign currency received for the implementation of the project will be useful to replenish the dwindling foreign exchange reserves in Nepal.

Such projects, if implemented on time, will also contribute to increase capital expenditure, read the press statement.

"With the parliamentary approval of the agreement, the way has been opened for the implementation of the project. For this, we urge the government, concerned provinces and local levels and MCA Nepal to take the work forward with the confidence of all stakeholders and the people of the affected areas."

Nepal and Nepalis will reap the benefits of development if the project is implemented within the stipulated time, CNI added.

Similarly, FNCCI said that all the misconceptions about the agreement will be shattered now that the agreement has been approved by the HoR clarifying the doubt on some of the issues. “We believe that timely completion of power transmission line and road maintenance projects, which are of strategic importance in the development of Nepal, will contribute to higher economic growth,” it said.

Due to the situation created by COVID-19, internal resources have shrunk and foreign aid has not increased as expected, it said and added that the implementation of the agreement will help in the revival of the economy after the pandemic and will also open the door for long-term export of electricity and transfer of technology.

The provision that projects under the MCC should be completed within five years of its commencement can also be a model for development and good governance, the FNCCI said.

As projects under the MCC have been constructed in more than three dozen countries, the private sector is confident about smooth implementation in Nepal as well.

FNCCI also said that that the ratification of the agreement will convey the message of a good investment climate in Nepal to the world community and will attract more foreign investment and assistance in the future.

Private sector umbrella organisations had long been demanding for the ratification of the MCC in national interest of the country at the earliest.