NEPAL: ELECTION OF PRIME MINISTER SCHEDULED

1. (C) Nominations for Nepal's new Prime Minister have to be
filed August 14, with the election scheduled for August 15.
Party leaders from the four largest parties have offered
support in principle to a Maoist-led consensus government,
but negotiations have been stuck on the allocation of the
defense ministry. On August 13 parties continued talking in
numerous meetings in an attempt to reach consensus. Pushpa
Dahal is still the leading candidate to be elected Nepal's
next Prime Minister.

Process for Electing the Prime Minister


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2. (U) According to the schedule published by the Constituent
Assembly (CA) Secretariat, nominations for the post of Prime
Minister must be filed August 14. The election is scheduled
to commence August 15. If only one person is nominated, that
person would be elected by acclimation as was done with CA
Chairman Nemwang. If there are multiple candidates then
voting will be conducted on one candidate at a time until
someone receives a majority. For example, if the first
candidate nominated did not receive a majority vote (248 of
the 594 qualified voters) then a second round of voting would
be held with the second candidate nominated. According to
Mukunda Sharma, Spokesman of the CA Secretariat, if no
candidate received a majority there was no plan to call for
new nominations. Rather, the CA would simply keep cycling
through the names until someone did receive a majority.

Defense Ministry Sticking Point in Negotiations


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3. (C) At an August 12 dinner hosted by the Norwegian
Ambassador for senior leaders of the four major parties
(Communist Party of Nepal - Maoist (CPN-M), Nepali Congress
(NC), Communist Party of Nepal - United Marxist Leninist
(UML), and Madhesi People's Rights Forum (MPRF)) and chiefs
of mission, all party representatives offered continued
support in principle for a consensus government. However, NC
representative Minendra Rijal was adamant that NC would
accept nothing less than the defense ministry as a condition
for supporting a Maoist-led consensus government. Dr.
Baburam Bhattarai (CPN-M) indicated this remains unacceptable
to the Maoists, and both party leaders rejected efforts by
the diplomats to suggest possible compromise solutions. In
contrast, Amod Upadhyaya, CA Member for NC, told Poloff
August 13 that while NC believed a Maoist Defense Minister
would paralyze the security agencies, NC was not maintaining
an absolute claim on the Defense Ministry for itself. He
indicated a Defense Minister from MPRF or from one of the
smaller parties, could also be acceptable to NC.

But Talks Continue


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4. (C) All of the party leaders at the dinner indicated that
negotiations were on-going across the parties, with numerous
sessions scheduled on August 13. They all acknowledged there
is a tendency to come to agreement at the last minute and no
one ruled out a late night session on August 13 or 14 that
might drastically alter the current deadlock. Upadhyaya
stated NC was still waiting for the Maoists to fulfill
previous commitments and a credible move by the Maoists to
address those issues would make it easier for NC to join a
consensus government. Amod Upadhyaya confirmed that NC had
tentatively decided to put forward its own nominee for Prime
Minister if no consensus is reached. He admitted that NC
realized it would lose the election, but the party leaders
thought it important to take a clear stand against the
Maoists.

Comment

KATHMANDU 00000910 002 OF 002




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5. (C) At close of business no breakthroughs have come out of
today's talks. It is possible that Maoist leader Pushpa
Dahal (aka Prachanda) will be the sole nominee for the
position of Prime Minister. However, it is also possible
that one or more other parties may nominate a candidate, as a
negotiating ploy, to make a point to their own supporters, or
to form an alternate government (excluding the Maoists).
Post assesses the chances of an alternate government as less
likely than a Maoist-led majoritarian government. The
Maoists have been trying hard to convince the UML to join a
majoritarian government if no consensus is found. While one
faction of the party appears open to this appeal, another
faction is resisting due to their concerns about the UML
being unable to maintain its identity and promote its
policies if it is the only party in government with the
Maoists. Even if Dahal is elected Prime Minister on August
15th cross-party negotiations will need to continue for some
time in order to fill other cabinet positions.
POWELL