HC Deb 26 February 1985 vol 74 cc100-1W
Mr. Carter-Jones

asked the Secretary of State for Foreign and Commonwealth Affairs when he asked the European Commission to give its reasons for rejecting the request of Leeward Islands Air Transport for support in purchasing Super 748s; when he expects to receive a reply; if he will ask the European Court to examine the Commission's reasons for its decision; and if he will publish the Commission's reply in the Official Report.

Mr. Raison

Our permanent representative to the European Communities wrote to the Commission on 20 December. The Commission replied on 22 February, and we are now considering what further steps we might take.

The text of its reply is as follows: Dear Sir Michael, Thank you for your letter of 20 December 1984 in which you raise the question of the selection of replacement aircraft fo.7 LIAT under the EDF financed project. I entirely share your view as regards the importance of maintaining harmonious relations between the Community and the Caribbean States on the eve of the Lomé III programming exercise. It is precisely for this reason that in recent months the Commission has gone to great lengths to explain its position, and the reasons for this position, through meetings with LIAT/CDB, press conferences and press releases. The Commission's conclusions are based on a series of economic and financial analyses carried out by its services, assisted by independent experts. The technical aspects of the project, in particular the question of the possible risks of new technology, have been subject to similar in-depth examination. In connection with the meetings between LIAT/CDB and the Commission services, hearings were arranged with the British and French manufacturers. The rules and principles, as laid down in the Lomé Convention, which have governed the Commission's handling of the LIAT project, are identical to those applied to other EDF projects in the past. Strict adherence to these rules has made it possible for the Commission to maintain a high degree of objectivity and integrity even in complicated and difficult cases, and in the face of pressure from private and public quarters. The disparity to which you refer between the Commission's conclusions and those of LIAT/CDB are to be attributed to the fact that a scrupulous examination of the LIAT/CDB figures, calculations and assumptions, carried out by the Commission services and its experts, revealed errors and discrepancies which generally favoured BA 748s. I would, however, like to point out that even when applying a number of decisive assumptions (e.g. the anticipated rate of increase in the number of passengers), which are considered by the Commission services to be unrealistic, the French/Italian ATR 42 emerged as the economically most advantageous choice, albeit with a smaller margin. When applying more realistic assumptions, the advantage of the ATR 42 became pronounced. The LIAT case is not the only one in which the Commission's conclusions differ from those of the recipient country or regional organisation. You will recall the Amarti Diversion project in Ethiopia, when the Commission, contrary to the initial opinion of the recipient government, maintained that the offer made by the British contractor was the economically most advantageous solution. I think you will agree that any deviation from the rules and procedures applied by the Commission in such cases would constitute a serious risk of damaging the credibility of the Commission and expose it to severe criticism from the Community and its ACP partners.