HC Deb 24 March 2004 vol 419 c882W
Sir Teddy Taylor

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the EU project to dig 50 wells for drinking water; how many of these have been completed; and what steps are being taken to reclaim funds misappropriated in relation to this project. [161699]

Hilary Benn

The "Ysaka" project was approved and started in 2000, and implementation was delegated to a Management Unit led by two co-directors (one European and one Paraguayan). Seven wells have been completed to date. Up to December 2002, the European Commission had disbursed a total of 3.2 million euro to this project.

Serious financial anomalies were uncovered in January by the Commission's annual audit for the period of 1 January to 31 December 2002. The two co-directors were dismissed immediately and supervision of the project was transferred directly to the European Commission's delegation to Paraguay. The Commission's anti-fraud unit is currently conducting an investigation that will seek to recoup missing funds. In the meantime the Government of Paraguay have filed a criminal complaint against the two co-directors. DFID and the Foreign Office will continue to monitor the situation.

DFID does not have a bilateral assistance programme for Paraguay.