Kathmandu, December 22

For the first time, a fully Nepali company has secured a contract under projects funded by the Millennium Challenge Corporation (MCC). Among various MCC-funded projects, the road improvement project has been awarded entirely to a Nepali joint venture.

The 40-kilometre Dhankhola–Lamahi road recycling project, to be built under the MCC grant, was awarded through a global tender to the Sharma–Kumar JV. The project is being implemented by MCA-Nepal with funding from the MCC grant and investment from the Government of Nepal. Contracts for transmission lines and substations under the MCC program had already been awarded earlier.

The contract for the road, based on Full Depth Reclamation and Superpave Asphalt technology, being used in Nepal for the first time on a pilot basis, is scheduled to be signed on Monday. Bids for the project were invited in October 2024.

Out of 11 construction companies that submitted proposals, Sharma–Kumar JV was selected. The joint venture consists of Sharma Construction and Kumar Nirman Sewa Pvt Ltd, and it is the first fully Nepali joint venture to secure a construction contract among MCC-implemented projects.

Previously, Nepali companies had won transmission line contracts only through joint ventures with foreign firms. This marks the first instance of a contract being awarded exclusively to Nepali companies, according to government sources.

Sharma–Kumar JV secured the contract for USD 20.8 million, excluding VAT (approximately Rs 3 billion). Companies from Nepal, India, and Ukraine had competed for the project. Of the bidders, four—including Sharma–Kumar JV, Kalika Construction, Tundi–Ashish JV, and Swachchhanda–Raman JV—were fully Nepali-owned. Other Nepali companies had participated in joint ventures with Indian and Ukrainian firms.

Following technical and financial evaluations of all 11 bidders, Sharma–Kumar JV was selected for the project. The Ministry of Finance described it as significant that a Nepali company secured a contract involving advanced road construction technology being used in Nepal for the first time.

Energy and road infrastructure projects are being implemented under the MCC program with USD 550 million in grants from the MCC and a contribution of USD 197 million from the Government of Nepal. Initially, the MCC compact signed between Nepal and the United States committed USD 500 million, with Nepal contributing USD 130 million. Nepal later increased its contribution due to funding shortfalls.

As the transmission line project still faced funding gaps, the MCC Board decided on January 2 to provide Nepal with an additional USD 50 million and informed the US Congress. After Donald Trump assumed office as US President, MCC assistance underwent a review. While the US later confirmed continued implementation of MCC projects and the original USD 500 million grant, it initially made no mention of the additional USD 50 million.

On Mangsir 3, the US Embassy in Nepal issued a statement confirming that Nepal would also receive the additional USD 50 million. Contracts have already been awarded for three substations and 315 kilometres of transmission lines under the MCC grant. Construction of an 18-kilometre transmission line from the New Butwal substation to the Indian border has also begun.

Under the MCC program, 400 kV substations are being constructed in Damauli (Tanahun), Ratmate (Nuwakot), and Nawalparasi. In addition, 315 kilometres of transmission lines, divided into four section,s are under construction.

The MCA project, which must be completed within five years or risk forfeiture of the US grant, came into force on 13 Bhadra 2080. From the date of entry into force, a five-year countdown begins, after which any unspent funds will be returned to the United States.

As of now, two years, eight months, and eight days have elapsed since the project entered into force. According to foreignassistance.gov, commitments amounting to USD 471.3 million (approximately Rs 66 billion) were created in 2023 and 2024 under the MCC’s USD 550 million grant pledge.

The MCC compact was signed between the Government of Nepal and the MCC on 29 Bhadra 2074. However, due to prolonged political debate in Nepal over its implementation, it took more than four and a half years for Parliament to ratify the compact. It was finally endorsed with an interpretative declaration on 15 Falgun 2078, and MCC project implementation formally began on 13 Bhadra 2080, six years after the agreement was signed.

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