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Trading fund cuts ECGD red tape

NEWS

IN A move to free the ECGD from Treasury red tape, a £2.9bn trading fund is to be established that will make it far more autonomous.

The government department guarantee's UK infrastructure spending overseas, underwriting UK firms' investment and revenue risk on major overseas projects, but currently has to get all applications for support rubber-stamped by Whitehall.

'The trading fund provides us with freedom to make our own decisions and cuts red tape, ' an ECGD spokeswoman said. However, the body will still be answerable to ministers.

Establishment of the trading fund in April is part of a major organisational and operational shake up at ECGD, which will let it underwrite a wider range and larger number of projects than previously, the spokeswoman said.

In a bid to become more user friendly, ECGD has already launched a new business group focusing on industrial sectors.

Previously it operated on a geographic basis, requiring firms bidding for work in more than one country to liaise with several ECGD teams.

Restructuring comes against the backdrop of calls last year for ECGD to toughen its lending conditions (NCE 1 September 2000).

Last year MPs on the international development select committee demanded ECGD withhold cover for projects infringing human rights or causing political instability, operate proper environmental controls and blacklist companies convicted of bribery or corruption.

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