HC Deb 01 November 1996 vol 284 cc263-4W
Mr. Barry Field

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the departmental minutes which the Overseas Development Administration laid before the House on 20 August. [1650]

Dr. Liam Fox

The departmental minute reported the assumption of contingent liabilities arising from tax indemnities given to the commercial banks which are making concessional loans to developing countries to finance the following projects:

Country Project Estimated maximum liability £
1 Indonesia Advancement of SI Science and Technology 1,432,665
2 China Guangzhou Metro Ventilation System 416,051

It was necessary to give the indemnities urgently during the parliamentary recess to avoid delaying the start of these two projects.

The departmental minute also reported that the contingent liability for the China Guangzhou metro overhead catenary system project had been underestimated by £88,317 in the earlier departmental minute laid before the house on 16 April 1996. This project is already being implemented. The financing agreement for this project will be increased. The contingent liability is now estimated to amount to a maximum of £916,354 instead of the £833,037 previously notified.

These projects are being supported by the Overseas Development Administration under the aid and trade provision soft loan financing arrangements which enable the banks to lend at concessional rates.

The departmental minute was placed in the Libraries of both Houses on 20 August and copies were sent to the Public Accounts Committee and the Foreign Affairs Committee.