The U.S. government has allowed certain works to proceed under the Millennium Challenge Corporation (MCC) grant project currently operating in Nepal, and MCA Nepal has started issuing procurement notices.
“MCC Nepal Compact works have been allowed to resume after the U.S. government granted permission, while reviewing foreign aid,” MCA Nepal mentioned in its statement. “However, this approval does not imply that any results have been concluded from the review.”
The works allowed to move forward include significant procurement activities and essential office operations, as stated by MCA Nepal.
“MCA Nepal is managing the resumed activities and remains committed to transparency,” the statement said.
MCA Nepal is awaiting updated details regarding the U.S. government’s foreign aid review. Meanwhile, it has stated that it is coordinating with the Nepal government and MCC to ensure compliance with the required tasks.
Earlier, on 2 Falgun 2081, MCC sent an email to the Nepal government, stating that, in accordance with President Donald Trump’s executive order of January 20, 2025, foreign aid evaluation and restructuring would be done, leading to the suspension of MCC-related expenditures for 90 days. After this, there was uncertainty about whether MCA Nepal’s activities would proceed.
Following the U.S. government’s permission to proceed with certain works, there are signs that the MCC grant will continue. During a recent meeting in New Delhi with Foreign Minister Dr. Arzu Rana Deuba, U.S. National Security Council Senior Director Ricky Gill expressed optimism about the continuous support of MCC.
Meanwhile, a meeting of the MCA Nepal board was held, where only a briefing about the ongoing works was presented, according to a board member.
Before issuing the notice allowing the resumption of certain activities, MCA Nepal had called for tenders for supervision related to the pavement recycling of the Dhankhola-Lamhi road on the previous Thursday.
Additionally, tenders have also been called for consultancy services related to the design and construction supervision of periodic maintenance for the Narayangadh-Mugling road.
The source informed The Ritible that these tenders were issued after receiving permission from the U.S. government.
Contracts for three substations and 18 kilometers of transmission lines had already been awarded, and physical construction had begun. However, earlier in Falgun, MCC had suspended the grant to Nepal for three months.
Under the MCC project, the construction of a 315-kilometer, 400 kV transmission line, three 400 kV substations, and some road improvement programs are underway.
Among them, construction has already started in some areas for the contracts related to three substations and 18 kilometers of transmission lines.
The remaining 297 kilometers of transmission lines will be built, with MCA having issued tenders on 12 Mangsir 2081. The tender for the Lamhi-Dhankhola road improvement project is still pending.
Before this, a tender issued two years ago for the construction of a 315-kilometer transmission line was canceled on 26 Ashoj 2080 after the bids received were 60 percent higher than the estimated cost.
Following a re-evaluation of the transmission line project, the U.S. Congress passed a proposal to add an additional $50 million (around 7 billion Nepali rupees) to the grant, as the previous budget was insufficient.
The MCA project, which is required to be completed within five years, started its implementation on 13 Bhadra 2080 last year.
Once the project enters into force, the countdown begins, and any unspent funds will be reclaimed by the U.S. government within five years.
