Kathmandu: The four major political parties of Nepal on Monday night inked a 16-point agreement to federate the country into eight federal provinces, paving the way for the promulgation of a new constitution.

The agreement was signed by the Nepali Congress, Communist Party of Nepal (Unified Marxist-Leninist) [CPN-UML], Unified Communist Party of Nepal (Maoist) [UCPN-Maoist] and Madhesi Janadhikar Forum-Loktantrik (MJF-L) with the objective to resolve the key contentious issues in formally proclaiming the new constitution.

The parties have agreed to form a federal commission to finalise the demarcation of the federal states, while the naming of provinces will be left to the federal assembly. A two-thirds majority of the federal assembly will determine the names of the federal provinces.

The Constituent Assembly will be turned into a central legislature parliament after the promulgation of the new constitution. Parliament will finalise the boundary of federal states based on a report submitted by the federal commission, which will have a mandate of six months, according to the agreement.

Nepali Congress president and Prime Minister Sushil Koirala, CPN-UML chairman K.P. Sharma Oli, UCPN-Maoist chairman Pushpa Kamal Dahal and MJF-L chairman Bijaya Kumar Gachhadar held discussions till late on Monday night to give final touches to the agreement.

According to the agreement, the lower house will have 275 seats with 60 percent (165 seats) directly elected and 40 percent (110 seats) elected through proportional representation system, while the upper house will have 35 members elected through all-out proportional representation system. A constitutional court will also be set up for 10 years.

The parties will adopt a parliamentary system of government with the executive powers vested in the prime minister and the ceremonial president elected through parliament.

However, the UCPN-Maoist has agreed to take the constitution drafting process ahead by putting a note of dissent on the form of government.

The elections for the president, vice president, prime minister, speaker and deputy speaker would be held after the declaration of the new constitution.

The constitution drafting process had been delayed due to the differences among the parties over the issue of federalism, mainly the number of federal provinces to be adopted in the new constitution, the form of government, electoral system, and judiciary.