Nepali PM says to complete peace in 4 to 5 months

By John Acher

OSLO (Reuters)- Nepalese Prime Minister Prachanda said Monday that his government aimed to complete a peace process in four to five months, roughly in time for when the mandate of a U.N. mission expires at the end of July.

A decade-long civil war in the Himalayan nation ended in 2006, and Prachanda's former Maoist rebels head a coalition government after a surprise election victory in April last year.

Nepal is under pressure to complete the peace process, which involves finding a future for former Maoist insurgents now in U.N. camps, before the U.N. mission's mandate runs out.

"I think now we are going to conclude this peace process within a couple of months. We have already decided a timetable to lead this process to conclusion in four to five months," Pushpa Kamal Dahal, who goes by his guerrilla name Prachanda, told a news conference during a two-day visit to Norway.

"We want to see this process to a logical conclusion in such a way that it can be a model of peace, particularly for south Asia," he said.

Prachanda said the country already had a "very inclusive national assembly" and has drafted a constitution that will provide for a federal democratic republic in Nepal, which abolished a 239-year-old monarchy last year.

The constitution is due to be ready by May 2010.

"Federalism is going to be one of the vital issues we will discuss in the constitutional assembly," he said after signing an agreement with Norway on a deal to expand cooperation in areas such as hydropower development and rural education.

An insufficient power supply has been crippling to the Nepalese economy, which relies heavily on foreign aid and remains among the poorest in the world despite the former Maoist rebels' pledges to create a "new Nepal."

The Norwegian firm SN Power, owned by state-owned utility Statkraft and state development fund Norfund, operates the Khimti hydroelectric plant east of Kathmandu, and the company aims to expand its portfolio of hydropower assets in Nepal.

"We have huge hydro (power) potential," said Prachanda, who was scheduled to visit a Norwegian hydropower plant near Oslo on Tuesday. "We want to learn and enhance the level of cooperation in the hydro sector with Norway."