Hammer Vs Sickle

Not much has changed since the row within the ruling Nepal Communist Party (NCP) erupted in February over the $500 million Millennium Challenge Compact (MCC) grant from the US government to build transmission lines in Nepal.

A dissident faction led by party co-chair Pushpa Kamal Dahal is still using the MCC as a battering ram to try to dislodge Prime Minister Oli from office. He has got Parliament Speaker Agni Sapkota to delay debate in the House, mobilised ex-UML dissidents and the NCP secretariat in which his faction has a majority, and incite populism and ultra-nationalism through the media to sabotage the initiative.

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The five-year project would help link new hydropower producers to the national grid, and export surplus electricity to India. Governments of major parties all enthusiastically endorsed the project when it was signed in 2017. But suddenly, it is stuck because the MCC has become a political football between the two alpha males of Nepali politics.

Dahal has used ex-UML figures like former prime ministers Madhav Kumar Nepal and Jhalnath Khanal, as well as Bhim Rawal, to flog Oli. While Dahal has remained behind the scenes, others have been on tv talk shows and social media to say that the MCC is anti-Chinese and is America’s response to China’s Belt and Road Initiative (BRI).

Outnumbered in the party secretariat, Oli has been trying to woo Nepal and others away from the Dahal faction. He said recently: “We need transmission lines. If the Americans want to build them for free, what’s the problem?”

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Most of the leadership of the Nepali Congress is for the MCC, which means the project represents an internal power struggle in the ruling party, while the government and the opposition are on the same page.

Many of the bureaucrats involved in designing the MCC say they envisaged it as a project capable of jump-starting the economy through better connectivity. Hydropower developers on the Budi Gandaki, Trisuli, Kali Gandaki, Marsyangdi, Kosi and Tama Kosi corridors all need the MCC’s 400KVa Kathmandu-Hetauda-Butwal transmission line to evacuate the electricity they generate.

“It is important for Nepal to start building these transmission lines with or without the Americans,” says Hitendradev Shakya, a power grid expert.

There is an extra 830MW of generation capacity coming up on the Bhote Kosi in Rasuwa and Nuwakot, although they have been delayed due to the lockdown. A 220KVa transmission line has already been built to take some of that electricity to Kathmandu Valley, but more grid capacity will be needed to transfer power to other load centres, and even sell future surplus to India.

This monsoon, Nepal Electricity Authority (NEA) is already losing Rs10 million a day in spilt energy because of the reduction in demand during the lockdown. But the utility has signed agreements to buy 6,000MW more from private producers in the next five years.

Without the transmission lines, those agreements will have to be scrapped, and Nepal may plunge back into the dark days of power cuts.