Nepal politics: Sher Bahadur Deuba and K P Sharma Oli agrees to share PM position on rotation basis

Kathmandu: In a dramatic political development, Nepal's two largest parties - Nepali Congress and CPN-UML - have inked a midnight power-sharing deal to form a new 'national consensus government' to replace the coalition government led by Prime Minister Pushpa Kamal Dahal “Prachanda.”

Nepali Congress President Sher Bahadur Deuba and Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) chairman and former prime minister K P Sharma Oli, reached an understanding on forming a new coalition on Monday midnight, according to former foreign minister Narayan Prakash Saud.

Deuba, 78 and Oli, 72, agreed to share the Prime Ministerial position on a rotation basis for the rest of the term of the Parliament, said Saud, who is also a Nepali Congress central member.

Nepali Congress, the largest party in the House of Representatives (HoR) has 89 seats at present while CPN-UML has 78 seats. The combined strength of the two large parties is 167, which is sufficient for a majority of 138 seats in the 275-member HoR.

The two leaders also met on Saturday to lay the ground for a potential new political alliance between the two parties, following which Oli's CPN-UML ended its association with the Prachanda-led government barely four months after extending support to it.

Under the agreement that is likely to be finalised on Tuesday, the CPN-UML chief Oli will lead the government in the first phase of the remaining term of Parliament.

The two leaders have agreed to share the premiership for one and a half years, turn by turn, Saud said.

The two leaders tentatively agreed to form a new government, amend the Constitution, and work out a power-sharing formula, which they reportedly shared with a few confidants, media reports said, quoting multiple senior leaders from both parties.

Nepal has had 13 governments in the last 16 years, indicating the fragile nature of the Himalayan nation's political system.

The ministers belonging to the CPN-UML in the Prachanda-led Cabinet are likely to resign en-mass in the afternoon, sources close to the CPN-UML said.

CPN-UML secretary Shanker Pokharel has told media persons that an agreement was reached with the Nepali Congress to form a national government led by Oli, a former prime minister.

The new government will be formed to maintain political stability in the country and make necessary amendments to the Constitution.

Meanwhile, Prime Minister Prachanda is holding talks with CPN-UML chief Oli to discuss the latest political developments, according to sources close to the CPN-Maoist Centre.

“Prachanda is not going to resign from the post at this moment. Nothing can be said before the talk being held between Prachanda and Oli concludes,” said Ganesh Shah, CPN-Maoist Centre secretary.

According to the agreement reached, during Oli’s tenure, the CPN-UML will take control of ministries, including the Prime Minister's position and the Finance Ministry. Similarly, the Nepali Congress will oversee ten ministries, including the Home Ministry, MyRepublica news portal reported.

According to the agreement, the CPN-UML will lead provincial governments in Koshi, Lumbini and Karnali provinces and the Nepali Congress will lead the provincial governments of Bagmati, Gandaki and Sudurpaschim provinces.

Oli and Deuba have also agreed to involve Madhes-based parties in leading Madhesh Province and have committed to constitutional amendments.

The draft agreement was prepared by a four-member task force, The Kathmandu Post newspaper reported.

It will detail the power-sharing arrangement, propose amendments to the Constitution, review the electoral system, including proportional representation, change national assembly arrangements, and discuss the size of provincial assemblies, according to a task force member.

Differences between Oli and Prime Minister Prachanda had been steadily building, and Oli was unhappy with the recent budget allocations made by the government for the fiscal year 2024-25, which he had publicly spoken about.

Worried by the closed-door meeting between Deuba and Oli, Prachanda had gone to meet Oli to assure that the government is serious about addressing issues raised by CPN-UML, including its concern about the new budget, observers said.

During their meeting on Monday morning, Oli reportedly requested Prachanda to support him by stepping down, the report said.

Prachanda offered Oli the post of prime minister within the current ruling coalition, which the latter turned down, expressing his desire to lead a consensus government, a CPN-UML leader was quoted as saying.

Prachanda, 69, won three votes of confidence in Parliament during his one-and-a-half-year term.