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Malaysia (Waterworks)

Volume 130: debated on Monday 21 March 1988

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To ask the Secretary of State for Foreign and Commonwealth Affairs what steps his Department took to ensure the technical soundness of Biwater's project to equip 174 Malaysian villages with waterworks before allocating funds from his 1986 water sector budget to support it.

Assistance for the rural water supply project in Malaysia was provided from the aid and trade provision in association with export credit finance. As in all such cases, approval of ATP assistance was subject to satisfactory appraisal of the economic, financial and technical viability of the project. In this particular case, assistance was approved in the light of the findings of an ODA appraisal mission to Malaysia.

To ask the Secretary of State for Foreign and Commonwealth Affairs why his Department approved a grant of nearly £60 million towards Biwater's Malaysia contract which was not subject to domestic competitive tendering.

Within the aid programme, we seek to secure value for money for the taxpayer and for the recipient country. This is generally best achieved by competitive tendering. In the absence of competition, the ODA carries out value-for-money checks. In this case, the Malaysian Government wished to proceed with the project by negotiating a contract with a single contractor (Biwater). An independent check established value for money.