Nepal’s Parliament on Sunday ratified the Millennium Challenge Corporation Nepal Compact, after weeks of haggling among the political parties.

Deliberations started on Sunday afternoon after the Communist Party of Nepal (Maoist Centre), the CPN (Unified Socialist) and the Janata Samajbadi Party (JSP)—three partners in the Sher Bahadur Deuba government—earlier in the day agreed to vote in favour of the compact with an “interpretative declaration”.

With the passage of the compact, which had been in Parliament since July 2019, Prime Minister Sher Bahadur Deuba has pulled off a coup, as he has not only managed to stick to the deadline of February 28 given to the United States, but also saved the coalition from breaking apart.

As far as the Maoist Centre and the Unified Socialist are concerned, they were left with no option than to come on board after maintaining a tough position for days against the American grant’s ratification.

Not keen on missing the February 28 deadline, Deuba, also the president of the Nepali Congress, had deployed multiple channels to negotiate with the main opposition CPN-UML to seek its support in ratifying the compact, even if it came at the cost of breaking the current alliance.

In a late night development on Saturday, the Congress, the Maoist Centre, the Unified Socialist and the JSP reached a tentative deal on passing the compact with the “interpretative declaration” attached. The leaders called it the middle path as it allowed them to keep their concerns alive.

On Sunday morning, the Maoist Centre, in a turnabout from its Parliamentary Party decision on February 16 to quit the government if the compact was moved forward in Parliament, agreed to vote in favour. The Unified Socialist followed suit. A Cabinet meeting then prepared 12 points of the interpretive declaration, as Parliament started deliberations on the compact, which was tabled on February 20.

After deliberations on the compact, Speaker Agni Sapkota put the compact and the interpretative declaration to a voice vote.

“I declare that the Millennium Challenge Corporation agreement and its interpretative declaration have been endorsed with majority votes,” said Speaker Agni Sapkota, after the deliberations on the two proposals.

Signed in September 2017, the MCC compact, which is meant for building electricity transmission lines and improving roads in Nepal, had become a hugely divisive issue in Nepal. The opposers of the compact had stepped up ultranationalistic rhetoric, saying some of the compact provisions undermine Nepal’s sovereignty.

When Parliament meeting commenced on Sunday afternoon, after being postponed for several days due to differences over the compact, Speaker Agni Sapkota allowed time for lawmakers to put forth their views, just as the UML continued its obstruction.

Most of the lawmakers of the Maoist Centre, the Unified Socialist and the JSP, besides UML’s Bhim Rawal, Nepal Majdoor Kisan Party’s Prem Suwal, coalition partner Rastriya Janamorcha’s Durga Poudel and Rastriya Prajatantra Party’s Rajendra Lingden, opposed some of the MCC’s provisions.

Rawal was the sole speaker from the UML, which decided to stay away from the entire MCC process as the party vowed to continue its obstructions. The party, however, did not obstruct lawmakers from reaching the podium. Nor did they create any hurdle in the MCC ratification process.

While airing his views, Rawal, one of the fiercest opposers of the American grant, called on all lawmakers not to ratify the compact.

Baburam Bhattarai of the Janata Samajbadi Party, also a former prime minister, Mahantha Thakur of the Loktantrik Samajbadi Party, Minendra Rijal and Gagan Thapa of the Congress and Hridayesh Tripathi, who was elected to the Parliament under UML’s election symbol, called for the compact’s ratification.

Thapa, also the Congress general secretary, said the government should come up with the interpretative declaration, clarifying concerns raised by some parties and members of the public.

“If the US government refuses to accept our interpretative declaration, the MCC won’t be implemented,” said Thapa. “We should express our commitment to annulling the agreement within a minute if the other party goes beyond our interpretative declaration.”

Thapa said the leaders who were responsible for bringing the MCC when they were in power were still making false claims instead of clarifying things to the people misled by false information.

“Let’s not lie. We have made trivial comments like the agreement is above Nepal’s constitution,” said Thapa. “Except Nepal Majdoor Kisan Party, all other parties have been involved in the MCC.”

Rijal, another Congress lawmaker, however, said that the interpretative declaration will have no effect when amendment, revision and development in the MCC is not possible.

“This interpretative declaration was brought just to manage the ego of some leaders,” Rijal said.

Despite the Maoist Centre and the Unified Socialist threatening to pull out of the coalition, the Deuba government, after postponing its plan by two days, tabled the MCC compact in Parliament on February 20.

Under the MCC compact, a 315km double circuit 400kV transmission line will be constructed. Five segments of transmission lines to be built are—New Butwal-India Border (18km), New Butwal-New Damauli (90km), New Damauli-Ratmate (90km), Ratmate-New Hetauda (58km), and Ratmate-Lapsephedi (59km).

Once completed, these infrastructures are expected to provide a vital missing link for power projects of different river basins to the existing high-voltage grid in Nepal. A part of the $500 million will be spent on improving road projects.

The American grant, which fell into political controversy in Nepal, also exposed Dahal’s duplicity, as in a letter he co-signed with Deuba to the MCC headquarters on September 29, the two leaders had sought four-five months to ratify the compact. While Dahal continued to deny having sent such a letter, he even got his political document passed by his party’s general convention in December-end in which he fiercely opposed the American grant.

But not only the letter, a response to it from the MCC also made it to the public domain, making it clear that Dahal was not opposed to the MCC compact while he kept on pandering to his party members.

Even as Dahal agreed to pass the compact by attaching the interpretive declaration, sister wings of his party were out on the streets on Sunday as well, protesting against the compact.

Deuba had come under immense pressure to ratify the compact after back-to-back communications from the United States following continued delays on the part of the Nepali leadership for failing to work on their signed obligations. In a phone call, Donald Lu, US assistant secretary, on February 10, had conveyed to Deuba that Washington could even review its Nepal ties should Nepali leadership fail to ratify the compact by the deadline they themselves had set.

The American grant assistance then lately caught Nepal into a geopolitical game, with Beijing taking a jibe at Washington for providing a gift to Nepal with an ultimatum, for a second time in a week, firstly warning the US against using “coercive diplomacy” in Nepal.

Earlier on Sunday, Finance Minister Janardan Sharma, who had abstained from the meeting on February 20, had proposed that deliberations be held on the MCC compact.

Minister Sharma said that the MCC would be implemented making the agreement beneficial for the country for which an interpretative declaration will be presented in Parliament.

“The agreement will be implemented ensuring that it serves national interest,” said Sharma. “The government will responsibly answer the concerns.”

The main opposition that chose to stay out of the entire MCC ratification process has said the interpretative declaration does carry any meaning.

“The [ruling parties] have not been honest to the people,” said Subas Nembang, deputy leader of the UML’s Parliamentary Party. “Questions have been raised as to why the ruling parties resorted to such an irresponsible act.”

At one time, as the two coalition partners continued to oppose the MCC compact, Deuba was close to reaching a deal with UML chair Oli whose government in 2019 had registered the compact in Parliament.

Referring to the Maoist Centre and Unified Socialist, Nembang said the interpretative declaration was brought to ensure face saving for some leaders.

“Even some lawmakers said so today,” said Nembang. “And we also felt so.”