Nepal PM forms new coalition, dumps old allies

By Gopal Sharma

KATHMANDU (Reuters) -Nepal's Prime Minister Pushpa Kamal Dahal named three ministers, including one each from two opposition parties, in a new coalition on Monday, dumping the centrist Nepali Congress party which had dominated his previous government.

Dahal, a former Maoist guerrilla leader in the mountain nation lying between China and India, formed a coalition cabinet including the Nepali Congress and other smaller groups last year.

But his Maoist Centre party, which is the third biggest group in the 275-member parliament, had criticised the Nepali Congress for not giving him free hand and putting "hurdles" to removing some ministers with whom he was not satisfied.

Dahal named a three-member cabinet including one minister each from the new coalition partners - the Communist Party of Nepal (UML) and the Rastriya Swatantra Party (RSP). The third minister is from his own Maoist Centre party.

No portfolio was allocated to any minister for now.

President Ram Chandra Paudel administered the oath of office to the new ministers, a presidential statement said.

"It is clear that the prime minister himself broke the coalition with us," said Bishwa Prakash Sharma, Nepali Congress general secretary.

But an aide to the prime minister blamed the Nepali Congress for not cooperating with him.

"There were mainly policy differences that made it difficult for the prime minister to continue to work with the Nepali Congress. So he is bringing in the UML and RSP as new coalition partners," Govinda Acharya, Dahal's press secretary, told Reuters without elaborating.

Party officials said Dahal, 69, wanted to remove some "non-performing" ministers including Finance Minister Prakash Sharan Mahat, who is from the Nepali Congress, saying he had not done enough to boost growth of the $40 billion economy.

Mahat has said the economic condition of the country was better now than last year.

Dahal’s Maoist Centre and the Nepali Congress are also claiming the chair of the upper house of parliament the National Council, a parliamentary body key to making new laws.

Analysts said after the change in coalition partners the prime minister must take a vote of confidence in the parliament within 30 days, which he is expected to win.

The full cabinet is likely to be announced after that, party officials said.

Dahal led a decade-long insurgency from 1996 which caused 17,000 deaths before he joined the mainstream under the 2006 peace deal overseen by the United Nations.

He is serving a third time as prime minister but did not complete the full five-year term during his previous stints.

Nepal has had 13 governments since it abolished its 239-year-old monarchy in 2008 and became a republic.

(Reporting by Gopal Sharma, editing by Shilpa Jamkhandikar, Raju Gopalakrishnan and Angus MacSwan)