HC Deb 30 January 1995 vol 253 cc480-1W
Mr. Denham

To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what topics were discussed at the recent informal briefing with members of the inspection panel of the World bank; and what conclusions were drawn by the United Kingdom executive director;

(2) if he will instruct the United Kingdom executive director of the World bank to support the preliminary recommendations of the inspection panel of the World bank on the Arun III project.

Mr. Baldry

There has been a preliminary exchange of views on the inspection panel's report on a request for an inspection of the Arun III hydroelectric project in Nepal. Executive directors decided to defer further action pending receipt of the views of the newly elected Government of Nepal, and also pending a review by the panel of its report in the light of additional information to be supplied by bank management.

Mr. Denham

To ask the Secretary of State for Foreign and Commonwealth Affairs what information his Department has about the current position of the Government of Nepal on approval of the Arun III project.

Mr. Baldry

We understand the newly elected Government have expressed broad support for the project, but wish to take stock before reaching a firm view on whether to proceed.

Mr. Denham

To ask the Secretary of State for Foreign and Commonwealth Affairs when the board of the World bank will consider the full appraisal report of the Arun III project.

Mr. Baldry

No date has been set.

Mr. Denham

To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what organisations he will consult before deciding the British Government's policy in the World bank on the Arun III project;

(2) what organisations will be consulted by the board of the World bank before it reaches a final decision on the Arun III project;

(3) what organisations he will consult before deciding the British Government's policy on implementing the recommendations of the inspection panel of the World bank on the Arun III project;

(4) what organisations will be consulted by the board of the World bank before it reaches a final decision on implementing the recommendations of the bank's inspection panel on the Arun III.

Mr. Baldry

The board as such does not normally consult outside organisations, but will want to be assured that the borrower and the bank have consulted fully, in accordance with bank policies and procedures. Individual members of the board will have their own arrangements for consultation. We have received views from a number of organisations, notably the Intermediate Technology Development Group, on the proposed project and have encouraged the bank to consult widely with informed groups, particularly those active in Nepal. We shall take account of these views when considering the proposed project and in relation to the report of the inspection panel.

Mr. Denham

To ask the Secretary of State for Foreign and Commonwealth Affairs what is the minimum projected rate of return on the Arun III project which would be required for the United Kingdom to support this project.

Mr. Baldry

As a minimum, we would expect the economic rate of return to exceed the opportunity cost of capital of 10 per cent. used for this project.

Mr. Denham

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's current policy towards the Arun III project in Nepal.

Mr. Baldry

The Arun project raises complex economic, environmental, social and institutional issues. Debate on these issues is continuing, especially given the new Government's desire to take stock of the project; and the independent inspection panel's report.